Do
I Need Life Insurance?
If
other people are dependent on you and will suffer financially if you
die, then yes.
For example, life insurance is a necessity for anybody who has dependent
children. You don't need it if you do not have financial dependents,
except, to maybe cover funeral expenses for which there is buriel insurance.
Far too many Americans have not considered the ramifications their passing
would have on their family. Mortgage payments, estate taxes, tuition,
debt, funeral expenses and legal fees are but a few of the expenses
that must be absorbed by your family after your death. Furthermore,
it is just as important to consider future expenses for your family
to maintain or improve lifestyle conditions. Fact is, a lot of Americans
who probably should have life insurance simply don't. For that, you
can blame the 1990s bull market, which enticed many people to put their
extra cash in the stock market rather than in insurance policies. The
percent of total U.S. households with individual life insurance dropped
to 46% in 2000 from 55% in 1986, according to data from consulting firm
SRI Consulting Business Intelligence. Meanwhile, U.S.-household ownership
of stock and bond mutual funds spiked from just 8% in 1986 to 26% in
2000. Of course, long-term investing is the right way to provide for
your retirement and pay for things like college tuition. But that works
only if you're around for years to keep making contributions to your
investments - and if the money can be left alone to grow. If your family
needs funds suddenly, your investments could come up woefully short.
A good life-insurance policy would solve that problem.
Life insurance
Glossary
