Nobody wants to think about anything unfortunate happening to themselves or their loved ones. Unfortunately, it’s necessary to think realistically when planning out your insurance. Life insurance – though not something most people want to think about – is a necessary way for families to maintain their assets after tragedy.

It’s an unfortunate fact that not enough people have life insurance. According to a 2017 study by LIMRA, 41% of Americans don’t carry life insurance. The common reasons many people don’t have life insurance is because it’s too expensive for them and they believe other investments are more important. If this is a concern, you can check out what factors affect your life insurance rates to see if it’s affordable for your current situation.

Life insurance exists to make sure your dependents gain financial support if something happens to you. While this isn’t as relevant for single adults without children, it’s still a good idea to make the investment. Who are the people that absolutely need life insurance in order to keep their family’s financial situation in check?

 

Parents with young kids: This is the time you need it most, actually. At a young age, you may not have built up assets that your family can rely on if something happens. The money from your life insurance would go to help raise your children. Without it, you’re leaving them with nothing.

Family “breadwinners”: Your company might have a cheap life insurance policy. With it, your insurance would provide income replacement to your family so they can keep up with expenses.

Parents of children with special needs: A life insurance policy will allow you to support your child financially no matter what happens to you.

People with cosigned debt: If you have debt through student loans or your credit cards, having life insurance will cover the costs of these debts so they aren’t thrown onto someone else. The average class of 2016 graduate has $37,172 in student loan debt; whether you have more or less than that, make sure you plan out your life insurance policy accordingly.

Business owners: Your insurance will pay off any debts you have, which will help heirs out significantly. It can also fund a buy-sell agreement so a business partner can buy out your share.

Stay-at-home parents: Life insurance covers any cost that will need to be provided following the death of a stay-at-home parent, such as daycare. Child care payments range by state, but yearly costs can be anywhere from $3,911 in Mississippi to $14,980 in Massachusetts. Make sure you have a backup plan for your small children.

Divorced parents: Any child support – and additional divorce-related payment – would be covered by a term life insurance policy. The average monthly child support payments were at $430 in 2010, according to the U.S. Census Bureau.

Homeowners with a mortgage: A term life insurance will match your mortgage, so your family won’t need to move if something happens to you.

 

The Bottom Line: Do You Need It?

If you fit any of the above categories, I would highly suggest investing in life insurance. If not, it may still be an investment you’ll want to make to keep your dependents secure. Whether your life insurance is there to pay for funeral costs or to provide extra financial security to your loved ones, it’s not a bad idea to look into rates.