Most single people don’t require life insurance because no one depends on them financially. However there are exceptions. Guaranteed Insurability is a solid reason to consider life insurance when you’re single. This means that if you are young and healthy, your insurability is at its peak and you’ll receive the best rates for a life insurance policy which then remains unchanged in the future come what may. Another reason for purchasing a life insurance policy when you are single is if you provide financial support for aging parents or a sibling with special needs.
As a single parent, you are the breadwinner, personal chef, taxi driver and so much more to your children. With so much responsibility you need to ensure that you have a life insurance policy in place to protect your children’s financial future.
Many people incorrectly assume that they do not need to think about life insurance until they have children. However what if one of you died tomorrow? Would one income be enough to fulfill the life you had planned for each other? Would one salary be enough to pay off debts like credit card balances, car loans, furniture loans, utility bills and more? If you were planning on having children, it would be a better idea to buy life insurance right away instead of waiting until pregnancy because this may prolong cover in some cases.
Many families depend on two incomes to make ends meet. If you had to suddenly pass, could your family keep up with their financial responsibilities and still maintain the same standard of living on your spouse’s income alone? Life insurance makes sure that your dreams and plans for the future don’t go away in the event of one’s death.
Life insurance is mandatory when purchasing a new home with a home loan from your bank. This ensures that in the event of your passing, the loan is paid off in full and your loved ones will not be left without a home or having to make drastic changes like move home.
Contrary to what some people may think, the fact that you don’t earn a salary each month does not mean that you do not make a financial contribution to your family. A stay-at-home parent can also be referred to as a babysitter, taxi driver, helper, and chef amongst various other designations. Household activities are all important tasks that are usually done on a daily basis and taken for granted due to the fact that no salary is actually coming in. However what we do not think about is the replacement value of these daily tasks, which are often highly underestimated. With life insurance, your family can afford to make the choice that best preserves their standard of living.
Besides protecting your family, life insurance can also protect your business. Have you ever thought about what would happen to your business if you, one of your partners or a key employee died tomorrow? Life insurance can help in many ways. A life insurance policy can be planned to fund a buy-sell agreement. This would ensure that the remaining business owners have the cash flow to buy the company shares of a deceased owner at a previously agreed upon price. In this case the owners would get the business and the dependents of the deceased partner would receive the agreed upon amount of money. To protect a business in the case of the death of a key employee, key person insurance - payable to the company, provides the owners with the financial flexibility required to hire a substitute or work out an alternative agreement.
If your children have moved out of your house and made a life for themselves and your home loan is paid off, you might feel the need for life insurance is no longer there. However, if you passed away today, your spouse could outlive you by 10, 20 or even 30 years. Would your spouse have to make drastic lifestyle adjustments to make ends meet? An adequate life insurance cover can help widows and widowers avoid financial struggles in retirement.
Depending on the amount of property you have your beneficiaries could be served with a large amount of inheritance tax that they would have to pay in cash after you die. The proceeds of a life insurance policy are payable straight away, allowing beneficiaries to pay off these taxes, funeral costs and any other debts without having to liquidate other assets.