Insurance is a complicated part of life, and the decision and application process can probably be likened to death and taxes; necessary and undesirable. You don’t want to be paying for unnecessary coverage, but you also don’t want to be caught by surprise. Because life happens in segments, certain events such as marriage, retirement, having kids, and moving abroad change the type of insurance you need. Below are some of the most common types of insurance, and the answers to common questions about when coverage is needed.
*Disclaimer: Every situation is different. This article should not be taken as financial advice. If you want specific advice for your situation, seek personal help from a trusted professional.
Life insurance is the most commonly held non-required insurance. By law you have to have auto and health insurance, but most people choose to have life insurance though it is not mandatory. This isn’t a great surprise, because most people have some level of contribution to the lives of others, and we don’t want them to be left in the lurch after we’re gone.
Life insurance is most often marketed to people who are married and/or have children or other dependents who rely on them. In these cases, the after-death payment is meant to cover the loss of the insured’s income.
This makes a lot of people think that if they are single, they don’t need life insurance. There are a lot of situations it could still be beneficial though, such as:
- If you support parents, siblings, or have anyone else who relies on you
- If you plan on getting married in the future, and can get locked in at a more affordable rate now
- If you’d like the payout to go to a charity or cause you support (this is not always an option, so read the fine print).
- You don’t want to burden anyone with funeral/body disposal costs
- You own a business and want to keep it secure
The only way to determine if life insurance is right for you is to do your research. Look at programs such as GIO personal life insurance, which allow you to compare quotes from several different companies. See if you can get a free consultation with an insurance advisor. Be ready to answer questions about your future aspirations and goals, as these greatly affect whether insurance will be beneficial to you.
Funeral Insurance is often an addition to life insurance, but there are small policies dedicated solely to covering funeral, burial, and other after-death expenses. These may or may not actually cover all funeral expenses, so if you’re considering funeral insurance, definitely read the small print. You might consider funeral insurance if:
- You don’t want to buy a larger policy and are only concerned with covering death-related costs.
- You don’t qualify for other coverage; many funeral insurance plans are guaranteed acceptance (but if you can qualify for coverage, usually plans that have requirements have lower rates).
Whether you’re looking at life insurance to provide for the ones you love, to leave a legacy for a charity, or to use as an investment, you have a lot of options. So do your research, look at the options for all angles, and remember, just because you’re at a certain phase of your life doesn’t mean you’re stuck with a certain amount (or lack) of coverage.