Do I Need Life Insurance?

No matter what stage of life you are in, you should at least consider purchasing life insurance to assist with the future financial protection for your dependents and your assets. In general, your need for life insurance is more likely to grow as you get older, but there's no such thing as being "too young" or "too old" for life insurance. In fact, the reasons why somebody may need life insurance have less to do with demographics and more to do with individual circumstances. We'll explore who needs life insurance and why buying life insurance can be one of the most important decisions you'll ever make.

What Is Life Insurance For?

The essential purpose of life insurance is to ensure that your financial obligations are settled and your dependents are financially secure even after your passing. In practice, life insurance can serve the following main functions:

• Paying off mortgages and other debts
• Supporting financial dependents
• Covering funeral expenses

Is Life Insurance Right for Me ?

Many variables play into this, but two big considerations are:

• Do you have dependents who would need to be provided for financially if you passed away?
• Do you have financial responsibilities that would need to be covered in the event of your death?

If you answer "yes" to either of the above questions, you should consider shopping for life insurance. Consider a policy that can provide sufficient coverage to ensure your financial responsibilities would be met even if something happened to you. If you know you will eventually want life insurance but aren’t sure if now is the right time, read on to learn some common milestones that might mean it’s time to buy a life insurance policy.

When Should I Get Life Insurance?

People who fall into one or more of these categories should seriously consider how purchasing a life insurance policy now could benefit them and their family members in the future.

Married couples, or unmarried partners in a serious relationship

If you are married or in a serious relationship, you should think about how your partner would be financially impacted if anything happened to you and consider purchasing a life insurance policy to provide for your partner’s future. And yes, unmarried people can list their partners as beneficiaries on a life insurance policy, so you can certainly consider life insurance before you are married or if you never plan to marry each other.

Think about the financial implications your death may have for your spouse or partner. Consider questions like:

• How much does your spouse or partner rely on your salary or other financial assets?
• Do you have shared assets or debts?
• Would your debts transfer to your spouse or partner in the event of your death?

Parents

The arrival of a new baby gives parents lots to think about, and one of the biggest items on your to-do list should be to review your life insurance coverage or purchase a life insurance policy if you don't currently have one. Your child will be financially dependent on you for at least around 20 years, maybe more, so you'll want to ensure you have a life insurance policy that will provide for your child's needs if anything happens to you during that period.

People with Other Financial Dependents

Some people have financial dependents outside of their spouse and children. For example, you may have parents, other family members, or friends who are financially dependent on you, and you want to protect their financial security just as much as anyone else's. Fortunately, a life insurance policy can provide coverage for anyone who looks to you for financial support.

New Homeowners

Buying a house is one of the biggest purchases that many of us make in our lives, and taking on a mortgage is both a key part of that process and a huge financial responsibility. If you die while paying off a mortgage, your lender will still expect the loan to be repaid. A life insurance policy can protect your family against the impact of this outcome.

People Carrying Other Debts

As well as mortgage debt, many people carry other debts that may be deducted from their estate after death, such as car loans. Debts that the deceased co-signed with another family member may be transferred to the surviving relative, creating a huge headache. If these circumstances apply to you, life insurance can be extremely helpful.

Who Doesn’t Need Life Insurance?

Although there are many great reasons for buying life insurance, some people may decide that it's simply not necessary for them. The following circumstances might point you in the direction of deciding to opt-out of life insurance:

• You have no outstanding debts
• You have no children or other financial dependents
• Or your spouse and any adult children are financially independent and would not be financially impacted in the event of your death

The circumstances above are most likely to apply to younger consumers with fewer responsibilities, but as we said in the introduction, this is very much about individual circumstances. Once you've weighed up your own responsibilities and obligations, seek out as much or as little coverage as you feel you need. Just don't cut corners or gamble your family's financial security on the assumption that things will probably work out fine.

How Much Life Insurance Do I Need?

Figuring out how much life insurance you need boils down to ensuring that sufficient money is available after your death to take care of your financial dependents and any outstanding financial obligations. Of course, this can quickly become complicated, and you want to take the time to make sure you get it right.

AIG Direct's Term Life Insurance Calculator is a great tool for generating a baseline idea of how much life insurance you should have. The calculator asks you a few questions about your present and anticipated future financial obligations and will give you an estimate within a few moments. Term Life Insurance is just one popular, affordable type of insurance, and there are many other types of policy you can explore.

How to Get Life Insurance

Once you've decided you want to purchase a life insurance policy, it’s good to familiarize yourself with all the different life insurance product options available to you. We recommend talking to one of AIG Direct's appointed Life Insurance Agents, who can talk you through all your options and relate them to your specific circumstances. Our agents are just a phone call away, so give us a call today on (800) 294-4544.

If you’ve already decided on the right life insurance policy for you, you can also apply online using AIG Direct’s online application system. It’s a simple and convenient way to get the life insurance coverage you need.