Single mothers. More than 40 percent of children born in the U. S. are born to unmarried women, and most of those women are in their 20s and 30s. Life insurance can provide invaluable financial protection for those new babies. Singles with no children. Why would a single person with no kids need life insurance? If you're young, healthy, and single, but plan to get married and have a family one day, there's no time like the present to start preparing for a secure financial future. You'll also probably qualify for a lower rate, so you might as well lock in your premium while you can. Parents of a special-needs child. Permanent life insurance can ensure your special needs child has financial support no matter when you pass away. Someone with co-signed student loans or credit cards. Term life insurance can cover the cost of your debt so you don't pass it on, and the policy can be scheduled to end when the debt payments end. High net worth individuals. If you have a high net worth, permanent life insurance can help your heirs cover estate or inheritance taxes.
Other candidates can be married or single family members who support elderly parents or other loved ones. Lastly, candidates can include benefactors who consistently and significantly support causes and organizations that are dear to them. 2. Individuals with joint financial obligations Joint debts entered into by spouses are a prime example here. If you and your partner own a home together, get life insurance — it will cover your housing costs in the event of your partner's untimely death. Individuals in this category can also include unmarried couples who jointly enter into leases, car financing arrangements, and even mortgages on a home or income-generating rental property. This same type of arrangement can also exist between a parent and a child, siblings, or close friends. You should also get life insurance if you've cosigned for some other types of debt, like a student loan or consumer credit debt, to protect your cosigner from having to foot the whole bill. Lastly, business loans personally guaranteed by an individual or among business partners can create joint liabilities.
What's next? If you've realised that you need life insurance, then it's time to figure out how much coverage you need. Doing a capital needs analysis may be useful – this means taking stock of how much money your family or dependents may need in the event of your absence. For example, if you have a 12-year-old child whom you expect to be financially independent by 22, you'll need to calculate the cost of covering 10 years of expenses, including the cost of tertiary education. Let's say you'll need RM500, 000, but you only have RM200, 000 worth of assets. This leaves you with a RM300, 000 gap, which you can close with life insurance coverage. Then consider what type of life insurance policy you need – this could be a term life insurance, whole life insurance or an investment-linked policy. On the other hand, if you've read through this article and decided that you don't have any dependents that need your life insured, that's okay – you shouldn't have to spend money on coverage that you don't need.
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While life insurance gives you a payout if you pass away or experience TPD, medical insurance helps you cover the cost of hospitalisation and treatment. Some types of life insurance, such as whole-life insurance or investment-linked policies (ILP) allow you to accumulate a cash value. This means that part of your premiums will go to building up savings or investments that you can withdraw during your policy term or when your policy expires. These policies tend to have higher premiums. Other types of insurance, like term insurance, don't have any cash value. These policies generally have comparatively lower premiums. How do you know if you need life insurance? Generally, the main deciding factor is whether there are people who depend on you financially. A life insurance payout isn't protection for you, it's a safety net for your family. Here are a few situations where you may want to consider getting life insurance: 1. Your spouse depends on your income A life insurance payout can give your spouse a financial buffer if you are no longer around or unable to work.