Top 5 Often-Overlooked Lifestyles that Really Need Life Insurance

Most of us tend to think that the primary purpose of buying life insurance is to protect our loved ones in case we die, especially those dependent on us for their daily needs. While basically true, this does not account for lifestyles that also need financial protection, despite not seeming so at first glance.

Why is Life Insurance Important for Everyone?

The main thing to remember is that if anyone will be financially affected by your death, you should have coverage. Other than death benefits, life insurance can also help you plan your estate, pay for funeral expenses and debts, or in case of permanent life insurance, even build a cash value that acts as an additional source of funds in case of a financial emergency.

Keep in mind that the ideal age for most Americans to buy permanent life insurance is in their 30’s or 40’s. If you do it before then, it’s hard to know what your life will look like later on since you’re so young, and if you wait too long, you may not qualify the same way because of medical reasons, or it just may be too expensive for you at that point.

Five Groups That Need Life Insurance

While many people understand the importance of life insurance in a general way, some groups that tend to get overlooked include:

• Empty Nesters

  If you think insurance loses importance after the kids have started building their own lives, you’re wrong. Many retirees help with raising grandchildren or have spouses outlive them, while others may need the financial security of a plan that builds cash value. Life insurance can also help you leave behind a legacy for your heirs.

• Singles without Children

  Many singles take care of older parents, support a favorite charity or wish to ensure their funeral expenses and debts are not piled onto anyone else, which life insurance can help with. It also makes sense to get insured when you’re young and premiums are lower, especially if you plan to have a family someday.

• Small-Business Owners

  As an entrepreneur, you have people depending on you. Permanent life insurance builds a cash value that you can borrow against for business expenses or funding employee retirement plans, buy-sell agreements can protect your business if you or a partner die, and key-person insurance can cover valuable employees.

• Retirees

  When you retire, you may have retirement income or savings to tide you through, but insurance can give your heirs extra protection. It can be used to pay funeral expenses, estate taxes, etc., or even to equalize estate distribution, e.g. if you’re leaving your business to one child, the tax-free insurance death benefits can go to another.

• Stay-at-Home Parents

  While most families have two breadwinners, those with one typically tend to buy life insurance only for the earning parent. Protecting a stay-at-home parent is equally important, and life insurance can help pay for nannies, cleaners and other service providers (which cost a lot!) to take over their activities in case of premature death.