Do You Need Life Insurance?

Cost/Benefit Analysis for Life Insurance
Every month some people put money into expensive life insurance policies which they may not need rather than having more money to put into groceries, rent or a college fund for their children.   Typically young, healthy adults who don’t have children could be making better investments than putting money into life insurance.

Young Families Must Carefully Consider Life Insurance Costs
Before investing in life insurance, young parents should give careful consideration to who will care for their children if something should happen to them. It is common for young parents to name their own parents as the guardians of their children in the event of a tragedy.   If their parents are financially secure, they may have no need for life insurance proceeds to financially provide for the children. If the named guardians are not financially secure however, life insurance may be necessary.

It the event that one spouse were to die, would the other spouse be able to financially provide for the family and care for everyone as well?   Life insurance commonly provides for the lost income of a spouse and for the replacement services needed to care for a home and family.   If one of the spouses would need financial help if left to raise the children on his/her own, then some amount of life insurance would be appropriate.

Investment Strategy is Part of Your Estate Plan
Young families should give serious thought to how much life insurance is necessary when budgets are tight and day-to-day expenses can drain resources.   There are also other investment options for children which may be more practical for future use than life insurance. Each month’s life insurance premiums may actually provide more assets for the children’s future if they were invested in stocks, annuities, or 529 accounts.

Getting Legal Help
An experienced estate planning attorney can help you create a strategy that helps you make the most of what your budget allows now and preserve a financial future for those who rely on you.

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