Let us take a look at life insurance needs. Who needs life insurance, why should one pay out money for a life insurance policy?
What is a life insurance policy really all about, what does it do? Life insurance is really a contract between a life insurance company and an individual. This contract states that upon the death of this individual the sum insured will be paid to a named beneficiary or the estate of the insured.
That being settled let us look at who needs life insurance.
Married Person With Dependent Children
The life insurance needs of married people with dependent children cannot be disputed. While you are alive and have an income you will do whatever is necessary to be sure the children have a roof over their heads and food to eat. You also sacrifice if necessary to provide an education for your children. If you have a spouse you want to know that s/he is able to continue on even if you died. There are tremendous life insurance needs there simply because you are married and have dependent children.
Life insurance needs for single parents are humongous. Think about it. You have to protect the children just as the married person does. When a married person dies there is at least one person surviving to take care of the children. The single person’s need is greater because someone may need to be paid to look after the children if this parent died.
Single Person With No Children
Life insurance needs are a lot fewer for a single person with no dependents. Outstanding debt, if any, need to be paid off. Funeral expenses as well as attorneys fees for probate need to be paid.
Business peoples life insurance needs take many different forms. Many businessmen need to have a life insurance policy to cover floating debt which may be necessary just to stay in business. Sole proprietors need life insurance to provide start up funds if they want a relative or friend to restart the business.
Key person life insurance is a necessity. You need a policy on that person who you cant do without. If that employee takes a vacation you have a problem. Think about the problems that would arise if s/he died.
Partnerships and small corporations have life insurance needs that cannot be ignored. These policies are used to fund buy sell agreements if a partner or shareholder should die. The proceeds go to the surviving partners or shareholders upon death and are used to buy out the shares from the deceased persons heirs as per the agreement.