Do You Need Life Insurance?

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Usually, someone who is dependent on a wage earner or a caregiver, such as a child, spouse or elderly parent, creates a need for life insurance. To help you decide on your family needs, check your circumstances against the following situations.

• Families with children usually need life insurance. The younger your children, the more coverage you will probably need.

  If both spouses earn income vital to the family, then both should be insured. When both spouses work, but income is limited, term insurance can provide adequate coverage less expensively. If this still exceeds the family budget, the couple may choose to adequately insure the primary wage earner first and the other when it is economically feasible. Or they may spread the risk with smaller policies on each spouse.

  In families where one spouse does not work outside of the home, life insurance may be necessary to replace services such as child care and housekeeping.

• Working couples without children or dependent parents must consider their lifestyle when assessing life insurance needs.

  Some life insurance would be helpful to couples who spend most of what they earn, have significant outstanding loans and balances on credit cards, or who would not want their savings to be depleted if one spouse dies.

• Single adults have little need for life insurance unless they are a single parent or supporting another person or want to protect their future insurability by buying life insurance while they are young and in good health.

• Children seldom need life insurance. Although you may want to consider enough coverage to pay burial and final medical expenses and also to protect their insurability. This can often be provided by adding a relatively inexpensive "child rider" to your existing policy.

  An individual whole life insurance policy on a child makes sense when a family can comfortably afford it. The advantages include providing the child and the family with a mutually beneficial savings vehicle and securing the child’s insurability for life insurance.