Posted on Sep 9, 2013
Who depends on you for support?
If we’re talking about emotional support, you can probably tick off a quick list. But when it comes to financial support, the picture gets murkier.
According to a survey by LearnVest and Guardian Insurance , almost one in five respondents said they didn’t need to worry about getting their own life insurance because their spouse is covered.
But they’re wrong. And even if you’re single, or sure you don’t need life insurance, you may want to think again.
Below, we’ll explore five times people depend on you, and how life insurance would help if something were to happen to you.
1. You Have Children
The most common reason people get life insurance is to replace lost income. so that a spouse and children would be financially taken care of if either parent were to pass away. Your children aren’t dependent on you for just food and shelter. Here are some other ways they rely on you financially that you may not have thought of:
- Housing: Your children likely depend on you to pay the rent or mortgage. If you were to pass away, your kids’ lives could be upended again, when they have to move into a more affordable home, or even in with a relative. Buying life insurance would help them, and your spouse, maintain the lifestyle they know.
- Childcare: Whether you’re a full-time parent, or work full time and pay for childcare, life insurance is key. If something were to happen to you, your spouse may need to stay home and care for your kids, foregoing his or her income, or hire help to do so. Either way, life insurance would help cover that expense. (And if you’re a single parent, life insurance
is imperative .)
- Schooling: From preschool to paying for college, how would your kids get the education you want them to have if you weren’t there to help fund it?
2. You’re Married, and …
Even if you don’t have children, your spouse may be reliant on you financially to keep his or her lifestyle intact. Namely, life insurance would help with the following in the event something happened to you:
- Full financial support: If you have a stay-at-home spouse, he or she may need time to transition back into the workforce. He or she may also require further education to do so. Life insurance helps bridge the financial gap.
- Funeral: Surprisingly, you could think of a funeral as the financial equivalent to a small wedding, according to LearnVest Planning Services certified financial planner ™ Rachel Sanborn. The most recent data indicates that the average cost of a funeral is $6,560—and that doesn’t include cemetery fees, flowers or the cost of a grave marker. Certainly, this sum could come as a serious financial shock.
- Sharing a mortgage or rent: Even if your spouse has his or her own income, you may pool your resources to afford your rent or mortgage. It’s especially important, if your mortgage relies on both incomes, to get life insurance coverage. That way your spouse may not be forced to sell your home in a panic.
- Credit cards: Credit card payments on joint debt can be a large expense for couples. If you were to pass away, would your spouse be able to manage the payments?
- Car loans and other debt: Couples often sign jointly for car loans and other types of loans. If you were to pass away, your spouse would be entirely responsible for the remaining payments.