I can’t think of a more boring topic to write about than life insurance, but sometimes it’s absolutely essential in your life! The question is, when is it essential, and when is it not? Let’s take a look at the wide variety of options that you could face when shopping around for life insurance.
Insurance for Your Children
Every parent loves their children. If you’d ask any one of them, I’m sure they’d tell you that they’d rather give their own life than to see anything terrible happen to their child. This is often the ploy of insurance salesmen. They know that you’d do anything for your kids, so if you truly love them, wouldn’t it makes sense to take out a life insurance policy for them? In the moment, it might seem to make the most sense in the world, but if you step back from the emotion in that situation it really doesn’t make sense does it? Does your child contribute to the household income? Most likely not. If you are following the steps to get wealthy do you have a few thousand bucks for the funeral? Most likely yes. So is there really a need for life insurance for your child? Nope. In almost every situation, I would advise against getting life insurance for your child.
Insurance for Your Spouse
Does your spouse contribute to the household income? For most of us, the answer is “yes”. Even if your spouse is a stay-at-home mom or dad (which is probably the most difficult job of all by the way), you’d have to say that he/she definitely contributes to the household income. After all, what if he/she wasn’t there? You’d either have to find an extremely flexible job to take care of your kids, or you’d have to take them to daycare each and every day. Well that’s certainly an expense! So, if your spouse’s passing would leave you with a mountain of bills, then it’s a good idea to get life insurance on that person.
If You Have Debts
If you passed away tomorrow, don’t you think that your spouse/family would enjoy the option of being completely debt free? After all, who wants to leave their spouse under water financially, especially when they are already grieving your passing? We all want to leave our loved ones in a great position financially, so it’s best if we take out a life insurance policy on ourselves to guarantee that this happens.
Special Life Insurance
Some of you might be saying, “But I have a diabetes and I can’t get life insurance. It’s just too expensive!” Well, there are insurance companies that do specialize in diabetes life insurance, and it’s the same story for other disabilities as well. You might have to look a little harder, but they’re out there.
Should You Ever Cancel Your Life Insurance?
Absolutely. If you are financially free and have no debts, plus your spouse could survive on their own without your income, then there’s absolutely no reason for them to depend on a life insurance policy if you pass. This is why I often suggest term life insurance because in theory, 20 years from now, you should be completely debt free and have a wad of cash in the bank!
Do you currently have life insurance? Do you think you might need more or less?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.