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March 22, 2016

Eight types of people who need life insurance

Bring up the subject of life insurance at a party, and you probably won’t be the life of the party for long. It’s one of those subjects everyone has thought about at one time or another, but for most people it’s just not a priority. Part of the problem lies in the misperceptions many people have about it.

According to the 2015 Insurance Barometer Study by nonprofit Life Happens and the insurance industry research group LIMRA, 30 percent of Americans believe they need more life insurance, and 43 percent would feel a financial impact within six months if their primary household wage earner died. But 54 percent say it’s unlikely they’ll be buying life insurance within the next year. It’s too complicated. It’s too expensive. There are other financial priorities. The reasons are many.

These simple misunderstandings about life insurance could be robbing millions of long-term financial security.

Two of the biggest misunderstandings about life insurance are who really needs it and what it can be used for. Yes, there are certain groups that need it more than others. But life insurance has evolved just like other financial tools, and you might be surprised how many different kinds of people and life situations are a good fit for life insurance. For example:

  1. Breadwinners. If someone depends on you financially, you need life insurance. Term life coverage can provide income replacement so if something happens to you, those who depend on you can continue paying everyday expenses.
  2. Business owners. Life insurance can be used to pay off your business debts if you die, help your heirs pay off estate taxes, or fund a buy-sell agreement. With a permanent life insurance policy, you can borrow against the cash value to cover business expenses. You can even fund a retirement plan for your employees with life insurance.
  3. Stay-at-home parents. In these tough economic times, it’s become more common for both parents to work. But there are still plenty of stay-at-home parents out there, and when you consider the value of the services the stay-at-home parent provides, it’s easy to see why he or she can benefit from life insurance.
  4. Single mothers. More than 40 percent of children born in the U.S. are born to unmarried women, and most of those women are in their 20s and 30s. Life insurance can provide invaluable financial protection for those new babies.
  5. Singles with no children. Why would a single person with no kids need life insurance? If you’re young, healthy, and single, but plan to get married and have a family one day, there’s no time like the present to start preparing for a secure financial future. You’ll also probably qualify for a lower rate, so you might as well lock in your premium while you can.
  6. Parents of a special-needs child. Permanent life insurance can ensure your special needs child has financial support no matter when you pass away.
  7. Someone with co-signed student loans or credit cards. Term life insurance can cover the cost of your debt so you don’t pass it on, and the policy can be scheduled to end when the debt payments end.
  8. High net worth individuals. If you have a high net worth, permanent life insurance can help your heirs cover estate or inheritance taxes.

Life insurance can offer peace of mind for people of nearly all ages and life situations. Don’t let misperceptions cheat you and your family out of financial security. Talk to the financial experts at Heffernan Insurance Brokers, or click here to get a quote today. 

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