Why would you need life insurance?

The question of whether you need or do not need life insurance is something that a lot of people have in their heads when hearing about this type of insurance. There are a lot of people who think that it is a complete waste of time while others view it as a necessity. It would be wrong to say that ones are right and the others aren't because each person judges from his own point of view and set of necessities. So it would be more descriptive to show how life insurance works in certain situation and what benefits can be missed if you don't have it.

Let's assume that you're married, you're living in a house that you have to pay out mortgage for 10 more years. And you don't have any life insurance. Say, you have some spare money that you're saving on an account. And suddenly something awful happens: you're hit by a car while walking down the street. You're not dead but are disabled for the rest of your life. Will those savings be enough to replace your income? And will your spouse be able to pay out the mortgage using those savings and their ordinary income? Hardly.

Let's take a look at the same situation but with life insurance coverage on your hands. You die after an accident, leaving your spouse without the main source of income and a lot of financial responsibilities to deal with including your funeral and mortgage to be settled. Life insurance kicks in and acts as a replacement of your income, paying out a set death benefit and even dealing with funeral costs. The policy can even be linked to your mortgage account and once the coverage kicks in it instantly pays out the remaining mortgage amount. That's what life insurance is used for.

Now, as you see having life insurance really pays off if you have important things to be covered. Whether it's a mortgage you have to pay out or want to make sure that your kids are going to college when they grow up no matter what happens, life insurance is a great back up for your family plans. Still, if you do not have any serious responsibilities, are single and self sufficient, life insurance may turn out to be just an additional expense you don't really need. So make sure to analyze your personal situation, needs and risks in order to see if life insurance fits into your plans.