Historically, estate planning has involved purchasing life insurance. This insurance provides financial security to survivors, helping to cover funeral and living expenses. However, not everyone needs life insurance. You should understand whether you need this coverage before you spend the money to obtain it.
Individuals with young children or those who support a spouse, disabled child, or disabled adult should obtain life insurance. Those surviving family members will be unable to support themselves so it is essential to provide for them. The money provided by the policy can be used to pay their daily living expenses as well as any required medical treatment. If a child plans to attend college in the future, the individual may want to factor in the estimated future tuition and room and board costs when considering how much coverage to purchase.
Those who will leave behind financially-strapped dependents should also consider purchasing life insurance. The cash from the death claim can be used to pay off any debts of the deceased, income taxes, estate taxes, and funeral expenses. This gives survivors one less thing to worry about during this particularly stressful time.
A person who does not have any financially-restricted dependents or minor children may not need to purchase life insurance. These individuals should consider whether they would like to leave money to another person in the event of their death. If the answer is yes, they should find an affordable policy that provides a benefit that they deem sufficient.
The decision whether to get life insurance is a personal one and depends on various factors such as the number of people relying on the individual for financial support. For those who need it, this coverage provides financial security for the future. The last thing a person wants is for loved ones to live in poverty after he or she has passed away.