Disability Income Insurance

Why Do I need Life Insurance If I Have No Dependents?

Why Do I Need Life Insurance?

I recently visited a financial planning forum and saw the following question posted: “Why Do I Need Life Insurance”. The question could have also been, “Why Do I Need Life Insurance If I Am Single? Looking at some of the feedback and responses, I thought that “Why Do I Need Life Insurance?” touches on various aspects of life insurance that should be of interest to my blog readers. My hope is that before you go looking for life quotes and possibly start searching for the best life insurance companies, as a lot of people rightfully do, you would want to read this post. The complete question, as posted in the life insurance forum, follows:

The benefits guy at work keeps telling me that I need to sign on to the company’s term life insurance plan. I’ve told him repeatedly that I don’t have a family, and I know of no one to whom I’d leave my possessions or money. However, he still insists that I need the coverage. For what reason would I need coverage under these circumstances?

Update: Everyone is missing the point. If you’re dead, then why care if you have unpaid bills. You’re dead. Burying you or throwing you in a ditch will make little difference to you at that point. They can’t take from my family’s assets, because I have no family, and it’s not as if I’ll need my assets anymore after the fact. With this in-mind, now answer the question.

The person asking the question, does have a point, I have to admit. If you do not have any family members you care about, do not plan to create a family, and if you really do not care what happens to your remains, once you are gone, then why bother with life insurance. Not sure, however, there are many people out there like that.

Assuming that an individual does not have any family members who would suffer financially if he/or she were to suddenly die, the possibility still exists that down the road one could get married (or not) and start a family and then be concerned with the financial security of that family if one were not to be around to take care of them financially. And, in that case, meaning having to purchase life insurance at a later time in life,  that person would end up paying more to get life insurance than if they would have gotten it earlier.

About Group Term Life Insurance

why do I need life insurance?

Why Do We Need Life Insurance?

Going back to the question posed by our friend the forum visitor, he/she is referring to Group Term Life Insurance, most likely. According to INVESTOPEDIA,

“Group Term Life Insurance is a type of insurance coverage offered to a group by an employer, association or other organization. Coverage provides a benefit to the beneficiaries if a covered individual dies during the covered period. As with some types of group benefits, group term life insurance is generally less expensive than individual policy coverage. For this reason, group term life insurance is often a key component in employee benefit packages”.

You may want to check to a look at the following:

VIDEO-UNDERSTANDING GROUP TERM LIFE INSURANCE, by VOYA FINANCIAL.

Pros and Cons of Group Term Life Insurance

why do I need life insurance?

why do I need life insurance?

PROS

  • No underwriting required for employer paid portion.
  • Consequently, those with severe health conditions can get coverage.
  • Age does not matter.
  • Employer may offer free coverage up to a stated amount of life insurance.Tends to be easy to sign up for.

CONS

  • If you want coverage above what the employer offers free, if any, and you are young and healthy, then the additional             coverage could be expensive because you should be able to get better rates with a policy specifically tailored for you.
  • Premiums increase every year. Group term life insurance is renewable annually and at time of renews each participitant, is, obviosly, one year older.
  • Coverage ends when you leave the job. In most cases you can continue paying for the coverage, but rates will go up according to your age and health situation at the time you apply for a new policy.
  • The employer elects they type of life insurance coverage. Most likely it will be Term Life Insurance.
  • But if you are young and healthy and decide to get your own policy for coverage in addition to what the employer offers free, you should also consider, Whole Life Insurance, Universal Life Insurance and Return of Premium Life Insurance.

TO CONCLUDE:

So, in answer to “Why Do I Need Life Insurance”, our feedback is that life insurance should be purchased as early in life as possible. The longer you wait the older you will be and the possibility of having health issues increases with age, as so does life insurance premiums. Even our friend in the life insurance forum should at least get whatever his/her employer offers free.

Call us at (786) 353-2528 and we will work with you to help you find the life insurance policy that meets your personal and financial situation. You can also get life insurance quotes using our quote engine by clicking Term Life Insurance.

why do I need life insurance?

Oscar G. Suris FL Agent
(786) 353-2528