Do I actually need to buy life insurance? You may find yourself asking this question. Do you think life insurance is only for married couples, empty nesters, retirees — or people with children and a mortgage? Well, you thought wrong.
Even if you don't think you need life insurance, a policy could still help provide you with peace of mind and financial protection for your loved ones. Here are some scenarios where it could make sense to buy life insurance — for those who think it's not for them.
You're Young & Have Debt
Are you in your 20s or 30s? Do you have debt? Life insurance could potentially help pay off that debt if you pass away, depending on the type of debt you have.
With credit cards, your estate will handle paying off your debt if you pass away. However, if you have a joint credit card account, guess who would then need to pay off that debt in its entirety? That's right — the other person on the account.
When it comes to student loan debt, the government will discharge and cancel your federal loans if you die, according to the U.S. Department of Education. But your private student loans may be discharged and canceled only if you're the sole person on those loans. Do you have a co-signer on your student loans, such as a parent, spouse or sibling? The debt burden would likely pass to them if you died.
If a loved one could end up shouldering your debt in the event of your passing, a life insurance policy could help them pay it off.
You Don't Have Children — Yet
You may not have kids now, but your situation could change down the line. Even if you never have children, your policy could help provide financial security someday for your spouse (or future spouse) — or your nieces and nephews.
If you're someone's legal guardian or are responsible for your siblings, a life insurance policy could also help ensure those who depend on you are taken care of financially. And when you purchase a life insurance policy at a younger age, you can generally lock in a cheaper policy than if you were to wait a few years.
You Have Boomerang Children
Let's say your children have left the nest for college. Before you claim true empty-nester status, consider the fact that there's a good chance your kids could return home. In fact, according to the Pew Research Center, more millennials are living with their families despite an improved job market.
Do you have a son who graduated from college with a degree in a competitive field? He could have difficulty landing a job — or at least a job that pays enough for him to be fully self-sufficient. A life insurance policy could help offer additional financial protection for your son if you pass away unexpectedly.
Having a child return home could also mean an increase in your household living expenses, which could prevent you from saving as much as you'd like to for your retirement. You could also consider an annuity, which could help provide you with a steady income in your golden years.
You Haven't Saved Enough for Retirement
While the ideal version of yourself may have plenty saved up to comfortably retire without debt, perhaps you're falling behind on your retirement goals in reality. If that's the case, know you're not alone.
Many older Americans are carrying debt loads, which makes it increasingly difficult to save up enough to leave something behind for your loved ones. A life insurance policy could help your loved ones pay off debts (such as a mortgage) — and help you leave behind an inheritance.
Even if you think you don't need to buy life insurance, it could help you leave behind a legacy of financial security for your loved ones.