All About Life Insurance


You know that being married with kids, you need life insurance. But what if you are divorced or widowed? Or if you are single and you never had children? You may think that the cost of life insurance is not a worthwhile expense for you.  In some instances, you may be right. However, there are circumstances under which someone who does not have a spouse would need to purchase and maintain cover.  

If You Are Divorced

If you must pay spousal support to your ex-spouse or child support to your children for a certain period of time, those obligations will continue even if you die before the term of spousal support or child support has expired. If you don’t have cover in place to handle those payments, the courts will go after your estate to attempt to obtain the funds. This is an area where it is wise to consult with an insurance broker as well as with your attorney to determine the extent of your financial obligation to your ex-spouse.

On the other hand, being divorced with no children and not obligated to pay spousal support, you may not need to concern yourself with purchasing life cover.  If you have a policy that names your ex-spouse as the beneficiary, you will need to change that with your insurance agent or broker while you are still alive. You need not inform your ex-spouse of your intent to remove him or her as beneficiary of your policy.

If You Are Widowed

Being widowed and with no children or your children are grown, you may be able to bypass purchasing life cover. This is especially true if you have made financial arrangement for handling your funeral and other final expenses. If you have debts such as a mortgage that you are still paying off, purchasing life cover will ensure that your mortgage or other debts are paid and that your estate will pass to your beneficiaries free and clear.

Single Parents

As a single parent, you have the same needs to purchase life insurance as someone who is married. Your children depend on your income, and they would suffer if you died. However, if you are single with no children you may still want to purchase a life insurance policy to cover the cost of your funeral and other final expenses. If you have a mortgage, car note or other financial obligation for which a parent or some other person acted as a cosigner, purchasing a policy to pay off the loan will take your cosigner off the hook financially if you die before your house or car is paid off.  For instance, if you have a private student loan, that obligation will remain active even if you die because unlike government guaranteed loans, private loans are not discharged by the death of the borrower.  

Likewise, owning a business with one or more partners, purchasing a life insurance policy ensures that your surviving partners are able to continue the business.  You may also want to purchase life insurance “just in case” you get married or have children later, or if you want to ensure that your final expenses are covered.  If the cost is an obstacle, opt for a term life policy.  Rates are extremely affordable for young people, and if you purchase a convertible policy, you can ensure that you will have coverage when you are older and may have health problems that would otherwise disqualify you from obtaining coverage

Other Considerations

If your dependents or beneficiaries will have expenses that must be covered immediately, purchasing a life insurance policy may be a good idea. This is because it is not considered part of your estate for the purposes of probate.  Instead, the proceeds from your policy are disbursed directly to your named beneficiary. Likewise, life insurance polices are generally not subject to estate taxes, so that your beneficiary will obtain the full face value of a term life insurance policy, or the face value plus an equity you have built up for a whole life plan.