Who Can Purchase Life Insurance?
Life insurance provides support to surviving dependents or other beneficiaries after the death of an insured. Here are some samples of people that may have life insurance:
- Parents with minor children – If a parent dies the loss of his or her income or care giving skills could create a financial hardship. Life assurance can confirm the youngsters will have the financial resources they have until they will support themselves.
- Parents with special-needs adult children – For youngsters who require lifelong care and can never be self-sufficient, life assurance can confirm their needs are going to be met after their parents pass on. The benefit are often wont to fund a special needs trust that a fiduciary will manage for the adult child’s benefit.
- Adults who own property together – Married or not, if the death of any one adult would mean that the opposite could not afford loan payments, upkeep, and taxes on the property, life assurance could also be an honest idea. An example would be an engaged couple who took out a joint mortgage to shop for their first house.
- Elderly parents who want to go away money to adult children who provide their care – Many adult children sacrifice by taking day off work to worry for an elderly parent who needs help. This help can also include direct support. Life assurance can help reimburse the adult child’s costs when the parent passes away.
- Young adults whose parents incurred private student loan debt or cosigned a loan for them – Young adults without dependents rarely need life assurance, but if a parent is going to be on the hook for a child’s debt after his or her death, the kid might want to hold enough life assurance to pay off that debt.
- Young adults who want to lock in low rates – The younger and healthier you’re, the lower your insurance premiums. A 20-something adult might buy a policy even without having dependents if there’s an expectation to possess them within the future.
- Wealthy families who expect to owe estate taxes – Life assurance can provide funds to hide the taxes and keep the complete value of the estate intact.
- Families who can’t afford burial and funeral expenses – A little life assurance policy can provide funds to honor a loved one’s passing.
- Businesses with key employees – If the death of a key employee, like a CEO, would create a severe financial hardship for a firm, that firm may have an interest which will allow it to get a life assurance policy thereon employee.
- Married pensioners – Rather than choosing between a pension payout that gives a spousal benefit and one that doesn’t, pensioners can prefer to accept their full pension and use a number of the cash to shop for life assurance to profit their spouse. This strategy is named pension maximization.