1. Identify Your Needs for Life Insurance

Not everyone's life insurance needs are exactly the same, nor do those needs remain unchanged through every stage of adulthood. For example, a married head of household with a stay-at-home spouse and dependent minors requires vastly different term life insurance coverage than a single person with no children. Similarly, a middle-aged entrepreneur who decides to start a small business would not benefit from the same policy as a retiree who wants to travel the world.

To help you choose an appropriate policy, we have put together a series of pages containing life insurance information and tools designed to help you identify your current coverage needs. Once you determine the type and amount of coverage required for adequate protection, you can begin to compare life insurance rates before making a final purchasing decision.

Let's start by reviewing some scenarios to help ascertain your current needs.

Single Supporting Loved Ones

Many single people mistakenly believe that they don't need term life insurance until they get married or have children. But the fact of the matter is that if you provide any kind of financial support to your siblings, aging parents, or other family members, then it would be a good idea to purchase a policy that would replace your support should anything happen to you.

Married with (or without) Children

If you're married, both you and your spouse should have term life insurance policies that provide enough financial security for the survivor to pay off the mortgage, settle outstanding debts such as credit card bills and car loans, and take care of funeral expenses. When children are involved, you'll obviously need to increase the amount of coverage you purchase.

Please see the third part of our life insurance information and tools section here at eAgencyIns.com for additional help in figuring out how much coverage is enough.

Stay-At-Home Parent

Why is insuring a stay-at-home parent a smart move? Consider all of the indispensible services he or she provides for the family:

• Cooking
• Cleaning
• Childcare
• Household budgeting/accounting
• Driving
• Gardening/landscaping

Now calculate how much it would cost to hire professional help in these areas if something happened to your stay-at-home spouse. Once you weigh those costs against the affordable life insurance rates available these days, you'll see that insuring your spouse makes financial sense.

Single Parent

As a single parent, there shouldn't even be a question as to whether or not you need coverage. Being insured will give you peace of mind that your children's daily expenses will be met long after you are gone. Moreover, many single parents use their policies as a guarantee that their children will have a means of paying for college (and thus securing a better future) in the event that catastrophe strikes.

Remember: If you are currently uninsured, you should be aware that life insurance rates are heavily influenced by age. The younger you are, the lower the monthly premium you can lock in for the entire length of your policy, be it five, 10, or 20 years (or more)—even if your health deteriorates over that period. Therefore, it's better to buy term life insurance as early as possible.

Empty Nester Free and Clear of Mortgage

Many working adults look forward to the empty nest years. The children have been put through college and are now off making lives of their own. The mortgage is completely paid for and retirement is just around the corner.

With these major responsibilities out of the way, you might be tempted to let your policy lapse. However, that would be a huge mistake—especially since your savings alone might not be enough to sustain your surviving spouse until pension and social security benefits kick in. Before you do anything rash with your policy, consider the following questions:

• Is your pension substantial enough to cover the medical bills that would arise from a lengthy hospital stay and treatment costs related to a terminal illness?
• Do you have enough savings to allow your surviving spouse to maintain a comfortable lifestyle for another 10, 20, or possibly 30 years?

As part of our life insurance information and tools package for prospective customers, we recommend reexamining coverage needs after major milestones. Reaching the empty nest stage qualifies as a milestone, so this would be a great time to review your current policy to make sure it still provides sufficient coverage. If it doesn't, you can always check current life insurance rates for a supplemental policy that would give your loved ones additional financial security.

Retired in the Golden Years

When you finally reach retirement age, you understandably just want to relax and enjoy the life you've worked so hard to build. But you can only do this if your financial house is in order. There are many special considerations to take into account during the golden years, particularly since you must now make do on a fixed income. With both you and your spouse out of the workforce there is virtually no chance of earning extra money to cover unexpected bills such as estate taxes and funeral expenses. Being able to count on a death benefit payout from a good term life insurance policy would remove a lot of the anxiety associated with these outlays.

Small Business Owner

You take on a whole new set of financial responsibilities when you run your own business, which is why small business owners need a different type of policy. Being properly insured can protect your partners, employees, and family members if you suddenly pass away. When comparing life insurance rates and policies, business owners should focus on the following clauses:

• Buy-Sell Agreement. This ensures that the surviving partners or stakeholders receive a benefit payout allowing them to purchase the deceased owner's share in the business. All business interests then belong to the new owners, while the deceased party's family receives cash considerations from the sale.
• Key-Person Insurance. This type of policy provides financial protection to partners and stakeholders in the event that a key person in the business (such as the CEO or a highly skilled employee) dies prematurely. Key-person insurance not only allows the business to continue with minimal disruptions, but also is required by most investors before they commit to significant funding deals.

Contact Us

If you still have questions after reviewing and using the life insurance information and tools section here at eAgencyIns.com, please contact us to speak with a knowledgeable agent.

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