Well that does not sound like a sunny warm summer day discussion topic that most people want to have. It is though a common question. Do you need life insurance and how much coverage do you need? Like most good questions, of course, the answer is “it depends”.
In general, life insurance is used to replace you. If you have young kids and you pass away, they will need someone to spend time and money to care for them since they cannot provide for themselves yet. If other people financially depend on your paycheck and you pass away, they may need a new income source to replace your paycheck. If you have special needs children and you pass away, they may continue to need help for the rest of their lives. The life insurance that is paid out is used to help those left behind continue on with their lives. Your death will be traumatic to them and so it is comforting to know that the potential financial burden of your death is minimized by the life insurance payout. It is very hard for a non-working spouse to lose their partner and then have to start looking for a job the next week in order to have money to pay the bills. Life insurance can help minimize financial burdens due to death, which is a time that is already full of many burdens.
Thought: Try to consider life insurance as being worth nothing more than a financial replacement of you. How much do people really depend on you? What other financial assets can you pass on to them without life insurance and how much more do they still need? Realize though that not everyone needs life insurance. You may not want to hear it but it is possible that everyone may be able to financially continue on without you.
By Cammie Humke, Investment Adviser at The Humke Group, Inc
Located at 555 S. Randall Rd in St. Charles, IL, phone 630-584-7343
The Humke Group, Inc is an independent firm offering securities through Summit Brokerage Services, Inc., Member FINRA/SIPC. Advisory Services offered through Summit Financial Group Inc., a Registered Investment Adviser. Opinions expressed are that of the author and are not endorsed by the named broker/dealer. All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.