- Preparing for the worst-case situations of life like death, sickness, and accidents is one of the most morbid part of personal finance.
- If you are the primary person that earns in your household, considering life insurance is a must.
- But if you find yourself in one of these two life situations, a life insurance might be optional.
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Life insurance is probably the most morbid part of managing your finances. Although no one likes to think about dying or getting critical illnesses, insurance is one of the most important aspects of personal finance. If you have anyone who relies on your financial support, planning for every worst-case scenario is a must.
Insurance is a financial tool that enables you to ensure your loved ones will have enough money to keep the lifestyle you are providing them, consistently put food on the table, and quickly get back on their feet if you are unexpectedly taken out of the picture or get seriously sick or disabled.
Do I need life insurance?
If you are the primary person that earns in your household, considering life insurance is a must. This will enable you to ensure the financial future of the people who depends on you and your income.
A dependent isn’t just your children. Anyone who relies on your paycheck is considered your dependent and their financial future will certainly be gravely affected if you suddenly pass without being financially prepared for this situation.
If you find yourself having someone that relies on your financial support in any way possible, you need life insurance unless you fall into these two unique life situations where life insurance is just optional.
Two life situations where life insurance is just optional.
There are two main life situations where you might not need life insurance.
The first one is when you plan not to have any dependents in the future and you are in a unique and favorable situation where your aging parents, relatives, or anyone in your life don’t rely on you financially.
The second scenario where you might consider skipping life insurance is if you have enough savings and investments to self-insure. That means you have enough money that your loved ones would be financially fine even if your income unexpectedly stopped today.
However, it would be unwise to underestimate the amount you need to self-insure. If the wealthy consider life insurance as a primary tool to protect their assets and loved ones for unexpected life events such as death, sickness, or accidents, you should too.