Tough Question: Do You Need Life Insurance?

It is common to ask whether you need life insurance if you are in good health. Many people do not think about life insurance until they are nearing the end of their lives, when the possibility of leaving loved ones with expenses seems more real. Ultimately, electing life insurance coverage is a very personal issue. However, many people experience the same concerns.

Your Employer Offers Life Insurance

The main reason to elect life insurance is because your employer is essentially offering free money. While you will contribute a small amount each month to your policy, maybe just a few dollars, your employer may provide a few years' worth of your salary to your loved ones in the case of your death. Even if you do not expect this event will occur, not electing life insurance when your employer offers it is missing out on an essential piece of your benefits package. Your employer considers your entire package, including your salary, benefits and perks, when they calculate your compensation. Choosing to forego one of these pieces is ultimately lowering your total compensation package.

Life Insurance Is for Your Family

One reason people do not elect life insurance is selfish: they have nothing to gain from it. Life insurance pays out to others in the case of your death. You will contribute the money into an account, but you will never see the benefits of that money. For some people, this is reason enough not to elect it. You may have a family with a tremendous amount of wealth; or, you may be the least wealthy member of your family. In both cases, life insurance may not make sense. You should discuss this issue with the family who will be responsible for arrangements for you upon your death to determine if they are willing to spend personal funds to make the arrangements you require. 

You Place Your Life at Risk

If you have a risky profession or lifestyle, it may be more important to have a life insurance policy. This does not just mean engaging in adventure sports. If you drive a lot on the highway, drive at night or are exposed to dangerous situations on your job, you may need to elect life insurance. While most people can plan for expenses if they know death is coming, unexpected deaths can be very costly. 

You Support Others

The most necessary thing to consider with your policy is if you are responsible for the care of others. If so, you should elect a life insurance policy. This will allow your family or those you support to carry on when you can no longer complete the tasks you complete. For some, this may mean you need to replace your salary. For others, you may need to replace the services you provide in the home each month. In either case, a life insurance pay out can make sure your dependents can get by after you are gone.

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