Do I Need Life Insurance?
Article by R. Joseph Ritter, Jr. CFP® EA
There are about as many uses and needs for life insurance as one can dream up. The most common need is to provide financially for family members in the event of an untimely death. For example, a father can use life insurance to ensure that his wife and young children will have a source of income in the event of his death. A mother can use life insurance to ensure that her husband and young children can afford the care and nurture her family needs in the event of her untimely death. Parents can use life insurance to provide for a source of money to pay college tuition or other needs their children may have as they grow into adulthood.
These are temporary needs, meaning that once the children finish college or leave home to start their own lives the need for the insurance is greatly reduced. It is for temporary needs such as these that you may consider buying term life insurance. As the years pass by and you are able to accumulate savings on your own to cover your financial goals, you may no longer require the benefit of life insurance to accomplish your goals.
Again, whether you should buy term or whole life insurance depends on your circumstances and the amount of money available from which to pay premiums. This article is meant to prompt discussion on the issues and give you a better understanding of the role life insurance can play in achieving your financial goals.