When Do I Need Life Insurance?

a hand holding a pen and a laptop

While most people know when to get health, auto, and property insurance, they may question if they need life insurance. One thing people should consider is that a life insurance policy intends to cover financial hardships that may occur at their expected or unexpected death. Life insurance is essential to estate planning because it ensures someone’s family can make financial ends meet when they die. Whether someone has a chronic illness or has excellent health, they should consider getting term life insurance if they have dependents.

Insurance policyholders tend to select their spouse and children as beneficiaries, who will receive life insurance proceeds upon the policy owner’s death. Insurance companies give the proceeds to the heirs via a payout, lower than the policy’s cash value, called the death benefit. If the insurance policy was active at the time of the policyholder’s death and the insured paid the necessary premiums, heirs receive the payout.

Policy owners pay life insurance premiums across the duration of the policy term. Someone’s life insurance needs can influence the cost of their premium payments. Factors that determine life insurance needs include family size, savings and expenses, finances, and health status.

Many life insurance options exist for policy-seekers to choose, such as income protection insurance, total and permanent disability (TPD) insurance, and trauma insurance. TPD insurance is a coverage option for people with permanent disabilities that might prevent them from working. Trauma insurance covers people with critical illnesses. Income protection insurance covers people who can’t work due to injuries and disabilities. People who seek coverage should compare each policy type available and choose based on their needs and circumstances. Compare life insurance with iSelect. iSelect does the research for policy-seekers and enables them to compare different insurance companies and policies with ease. This website filters insurance options according to what people prioritize and prefer in an insurance policy.

Policy payouts can help pay for medical bills, funeral costs, and debts. For this reason, insurance policies benefit single people with no dependents as they benefit married people, parents with young children, and business owners. Beneficiaries can use the money to afford the costs of living and everyday expenses, and pay off mortgages and education fees.

Life insurance is necessary for situations where the insured and their beneficiaries are responsible for older adults. Life insurance policy proceeds can assist families in caring for older adults at home, rather than a residential care facility. Families will be able to get prescriptions for older adults, take them to doctor visits, and remodel their homes to accommodate their physical and mental needs. The United States Aging Survey reports that 28 percent of older adults improved the lighting in their homes, and 34 percent of older adults reworked their bathrooms. 

These changes allow them to move and function better in their homes. To make homes safer for older adults, families can consult a professional company, such as Live in Place Designs, for aging in place remodeling. Skilled contractors make renovations to accommodate residents’ current and future needs and make homes functional for everyone.

Modifications such as improved lighting and easy-to-access light switches, bathroom rails, handrails, grab bars, ramps, and wheelchair-accessible walk-in showers and entryways are effective in preventing older adults from falling. Expanding the space in rooms and installing safety features that accommodate aging allows older adults to have comfort at home and stay close to their loved ones.

Mourning the loss of a loved one is hard enough, and being unable to meet financial obligations can add unnecessary stress. Life insurance is a guarantee that a policyholder’s family will have their needs met.

Featured Collection