Life Insurance or Not? What makes sense

Life insuranceIt is important to have insurance for a family’s well-being. However, it is not always the case. For instance, when you have enough wealth that you no longer need insurance or when kids are grown up. One should keep informed to know when they no longer need it.


Life insurance is bought in order to protect oneself and one’s family with coverage that will not be outlived. This is a point which goes in favor of whole life or universal life insurance, rather than term life insurance. This policy is bought for it to pay benefits upon one’s death, and it is the main reason for choosing this option.


However, even if it makes sense to some people, to some others it will not make sense. This is because many people do not need to worry about outliving their life insurance, because they outlast the need for life insurance.


The following circumstances reflect situations in which life insurance is no longer needed:


–          When a family has accumulated enough assets and income streams so that they can care for themselves independently

–          When children have grown up and become self-sufficient adults

–          When one’s property is too small to owe property taxes or liquid enough to pay the taxes.


Whole or universal life insurance which is also known as permanent insurance protects indefinitely to death and it has an investment component called cash value. On the other hand, term insurance lasts for a given period of usually 20 to 30 years, and it carries no cash value. The latter is usually cheaper.


Life insurance is usually bought to replace the future income of the family’s breadwinner. Parents with very young children and families saving up for their retirement are two groups which might need this type of insurance.

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