If you’re deciding whether or not to purchase life insurance, ask yourself this question: ‘would my loved ones be financially worse off if I were to die tomorrow?’ If the answer is yes, life insurance is something you should try to add to your budget. Here are some of the instances that may make it a smart idea to purchase some sort of life insurance policy.
The younger you are, the healthier you are likely to be. This means, that life insurance is less expensive at this point in your life.
A life insurance policy can help cover the expenses associated with funeral and burial costs. According to the National Funeral Directors Association, the average funeral in the United States is around $11,000. While this may be the last thing on your mind while you are in your 20's, it's important to have a plan in place so you don't leave the burden of a funeral to loved ones.
While federal loans will be canceled, if you took out any private loans, co-signers may become responsible for paying them back following your passing. Even if your spouse wasn’t a co-signer on the loan, if you live in a community property state, any debt you acquire during your marriage may become their responsibility.
If you own or are starting a small business, life insurance may also be a good idea. The funds from life insurance will help your business recuperate from financial losses that result from a death.
If you have specific questions about life insurance policies, contact a financial planner who can help you determine the amount of coverage necessary for your situation