Life Insurance: Do You Need It?

Life insurance needs vary depending on each individual. Many people think they need more than they actually need while others, who should have a substantial amount, don't have any. The earliest form of this protective coverage is said to have shown up during the times of the ancient Romans. Individuals within the early communities put their money together to pay for burials. Some people think of insuring a person as a gamble; companies look at statistics about the chances that someone will die early or late and insure him or her at a certain cost. Most motorists have policies for their vehicles and lucky individuals have health care coverage, but what about life insurance? Have you wondered whether or not you need this protection? Here are some things to think about:

- Who depends on you? The main bread winner or winners of a family are often the individuals who most need to be insured. If they were to die unexpectedly, the family's source of income would be cut off and the dependent parties would have no source of support. Even if one parent was to die unexpectedly, the other parent would have a hard time keeping up with the bills and tasks on only one income. When one spouse works outside the home and the other takes care of the children, etc., all job duties will need to be filled by someone. Child care, housecleaning and errand running cost money, too, and must be considered in the equation.

- What about beneficiaries? The beneficiary or beneficiaries are individuals who are named by the insured to be paid a sum of money upon the insured's death. This could be a spouse, parent, child or charity organization, to name a few. There might be percentages named for more than one person or organization.

- Are there different types of policies? There are different types such as term, mortgage or whole life. The term policies would be taken out for specific terms such as ten, twenty or thirty years. These are less expensive than some options and are designed to cover certain time periods such as the kids' childhoods, the span of certain loans and other periods. A mortgage insurance policy is similar except that it is linked to a person's mortgage. In the case of a mortgage holder's death, this type of policy would pay off the house. Whole life policies are not designated for specific time periods; they are more expensive but also have some additional benefits. They accumulate cash value, for example, and may be cashed in or borrowed from.

- What do policies cost? The younger and healthier a person is, the less it will cost to insure him or her. Companies have developed actuarial tables which assess the risk factors in insuring certain individuals. Older and sicker individuals are more likely to die sooner and cost the insurance companies more money, so policies are pricier.

If a person is wondering whether he or she needs life insurance, it's important to consider a few things. Who depends on them, who the beneficiary might be, the types and costs of policies are all considerations in making a decision.