Do I or Don’t I Need Life Insurance?

By Tamara Brown

Life insurance is such a difficult financial hurdle for so many people. You are either nervous about the reason you need life insurance, or think that it may be too expensive to purchase.
I am going to try and make this as easy as possible to help you make that decision with these 5 questions to ask yourself:

1. Does anyone rely on me for my income, such as a spouse, child, parent, sibling, partner or charity?

If the answer is 'Yes': Keep reading

If the answer is 'No': You don’t need life insurance

2. Do I expect that I will need to provide that income for financial support forever? For example, a special needs family member?

Yes: You should look into a permanent life insurance policy that will last your lifetime and provide the benefits that you need to care for that person.

No: Keep reading

3. Do I want to protect a dependent for a certain period of time, let's say, for a specific number of years? For example: I have young children that need support until they are an independent adult; I have a mortgage to pay off; or, I have a spouse or partner to provide for.

Yes: All you need is Term Life Insurance. Term is inexpensive because it will only last the certain number of years that you choose: 10, 20, 30 years. This type does not last forever. It can have conversion options to change to permanent if you choose that down the road.

4. Do I want to make sure that if I die prematurely that those that count on me would not have to worry or struggle financially?

Yes: Buy a term policy with a death benefit that is equal to at least 10 times your annual income needs, and up to 20 times your annual income needs. With this higher death benefit your dependents can invest the money and live off the income, providing them an annual income which you can no longer provide.

5. Am I comfortable with my annual premium changing every few years and becoming more expensive?

Of course not! Look for a LEVEL premium term policy that will keep the premiums the same for the number of years you need the coverage, or look into a permanent plan that will keep the premiums the same for the entire term of the contract.

Life insurance does not have to be a scary or difficult hurdle to cross to insure that your family, dependents, or a charity that relies on you, are taken care of in the unexpected event that you die prematurely.

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