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14. Do I Need Life Insurance?

Life insurance is a standard part of estate planning. It is most useful when there are young children or dependents in a household who would need financial care if something unexpected happens to you. Most policies can provide an immediate cash payment of a death benefit, helping to cover funeral expenses, tax obligations, and other needs. Do you need life insurance? If you do not have any children or dependents who rely on your income, then it may not be necessary. If you do need a policy, then it is vital to decide how much you should purchase and the type of policy you will require. The Two Types of Life Insurance There are several different types of life insurance from which to choose today, but all of your options fall into two primary categories: term and permanent. Term policies have a definitive length of coverage, which is usually somewhere between 10-30 years. There is no cash value to the plan, but it will immediately replace lost income in the event of a tragedy for an extended period. It is straightforward, simple, and inexpensive. Permanent policies are more expensive, but they develop cash value over time. It can act like an investment or savings account as you continue to pay your monthly premiums. You will receive coverage for life with this policy or to a specific age, which can be as high as 121. Different options include indexed universal, group life, specialty life, whole life, and accidental death and dismemberment, helping you to find a specific policy that meets the current and future needs of your family. Life insurance provides your estate with the resources it may need after you are gone. It may not be necessary for everyone, but a policy is a good idea if someone relies on you for income.

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