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Who can give up buying life insurance?

Who can give up buying life insurance?



Who can give up buying life insurance? 

Life insurance is difficult. There are scenarios in which it is important to your family, but there are also instances when it may not be needed. If you have term life insurance, there may be times when it just doesn't make sense to keep it.

Cash-value policies, on the other hand, accumulate value and provide coverage that you won't survive as long as you maintain premiums. Whole life, changeable life and universal life are the three flavors you can choose from. However, cash value insurance shouldn't sit there either.

Not everyone needs life insurance. People who have accumulated enough money and assets to independently take care of themselves and their loved ones' needs in the event of their death may skip paying for life insurance, especially if it is a term policy. On the other hand, there are people whom experts say should never be lived without life insurance; These groups of people are listed below.

Couple

Whether you're just married, have a domestic partner, or are celebrating your 20th anniversary, you and your significant other have life plans based on a certain income level. Unless each of you is able to maintain that income level on your own, it is important to have life insurance to prevent drastic lifestyle changes if one of you dies.

This is true even if both of you are still employed, if both partners work. Some spouses may or may not want to take an extended break from work after the death of their loved one.

Life insurance offers a chance to grieve or adjust to new life circumstances, says Jason Tate, CFC, CLU, CASL, owner of Jason Tate Financial Consulting in Murfreesboro, Tenn.

Mortgage Holder

Home mortgages are one of the largest assets and liabilities on a person's personal balance sheet. If a homeowner dies, before the mortgage is paid off, the beneficiaries and the lender may be protected from the proceeds of the life insurance policy, Tate says. “The lender wants to know whether the mortgage payment can be covered and requires the ability for beneficiaries to pay house payments and to prevent another tragedy of being out of their home when grieving. "

New Parents and Parents of Minors

A new baby is a source of pride and excitement. It is also a small person, who is financially dependent on you for the next 18 years or more.

"At its core is the responsibility for both parents to provide for a surviving spouse and child or children," Tate says. "Life insurance provides tax-free funds for income replacement or debt repayment to the surviving spouse or guardians and children, which allows the family to maintain their current lifestyle."

Life insurance plans should look beyond the child's first 18 years, Tate emphasizes. Parents want to provide for their children's college education in the event of their passing, they should consider that expense when determining the amount of life insurance.

Minor

The loss of a child can be very devastating to a family and parents wanting, or wanting to take time off from work. On top of that emotional toll, there are funeral and burial costs. "It's uncomfortable for parents to imagine, but families should be protected with life insurance in the event of a child's tragic premature passing," Tate says.

Sometimes a minor child can be added to an adult's policy at a reduced cost through child rider endorsement. “That rider can generally remain effective until the child reaches the age of 18,” Tate says.

Other policy options include purchasing a whole life policy that a child can hold for the rest of his or her life. "It provides a guarantee of insurability regardless of health," Tate says.

Read More : 

What are The Benefits of Life Insurance?

Parties to Divorce

A trip down the aisle rarely involves planning to part ways. But if it does, don't be surprised if the judge or arbitrator suggests both spouses purchase life insurance on themselves for the benefit of the other spouse, if minor children or financial responsibilities exist after the divorce.

"Policy coverage can extend for a certain period of time, making term insurance appropriate for the situation," Tate says.

Most individuals who are unmarried, financially independent, have no dependents, and have no business do not need life insurance.

Business Owners and Partners

A new business comes with inventory, investments and, at times, debt. "To provide solvency, business owners must protect their personal and business interests with life insurance in the case of an owner's premature demise," Tate says. Insurance on the owner can help the surviving spouse weather the transition until the business can be continued or sold.


If you have a business partner, then that person is equal to your professional spouse. Like their domestic partner, business partners need to be protected with life insurance in the event of the other's demise, Tate explains. Insurance must cover each participant and establish how the transition will take place if one of them dies.


"When a business partner passes away, the money helps to purchase the remaining stock or business interest from the deceased's estate or family. Property for property immediately establishes value on the property,” Tate says.


Those who want to leave a financial legacy

Generous relatives who wish to pass money to their beneficiaries for inheritance purposes should purchase life insurance. Whether grandparents want to provide for their grandchildren's education or someone wants to fund medical equipment for a local hospital, life insurance can provide the money to beneficiaries, usually tax-free, according to Tate.


Which type of life insurance is the most affordable?

Term life insurance is the least expensive option to get the death benefit. However, the policy will terminate when its term expires and no additional cash value will accrue.


Who would not need life insurance?

Single individuals or those without dependents, and who are themselves financially independent, may not benefit much from life insurance. However, such individuals may still wish to purchase coverage to leave an inheritance on their death.


At what age should you buy life insurance?

In general, life insurance is cheaper when you are younger and healthier. So, if you think you will need it now or in the future, you should buy it as young as possible. For example, a young couple may buy life insurance when they get engaged or when they have a child.


What if you don't have any life insurance?

Those who do not have life insurance can pass along financial obligations such as loans and unpaid bills that become the responsibility of their heirs.


At what age should you stop life insurance?

If you have a term policy, the term should expire once the death benefit to cover all liabilities has passed. For example, after a child finishes college and he can support himself financially. A permanent policy lasts for your entire lifetime, so as long as it is paid off, it should be kept indefinitely. For permanent policies that are no longer required, you can surrender the policy and get back the cash value involved.

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