What are some situations where life insurance is not needed?

Question

I need this for a financial planning project. i need to find out when life insurance is not necessary in a situation

Answer 1

The purpose of Life insurance should be to protect against the often large financial burden created by an unexpected and premature death. If life insurance is in effect at death, the insurance company will pay the death benefit to the beneficiary named in the policy, subject to policy provisions. Life insurance benefits protect a business or family when they may be most vulnerable to the problems caused by a lack of ready cash.

If no one is counting on you for financial support, e.g. your children are grown and on their own, and there is enough money in your estate to pay final expenses, then you don't need life insurance.

Answer 2

Hi, your question has been sufficiently answered, but I wish to answer some of the answers:

(1) Not all life insurance is the same. You may have 'riders' or further options that, if selected, you get more benefits. One of them is terminal illness. So yes, life insurance can be GREATLY needed for terminal illness and it's super-expensive hospitalization costs

(2) The person has a good point: why insure children when they don't provide income? well, for one thing, when you insure a child with some form of permanent life insurance, it's very inexpensive. Because the cost stays the same for the person's entire life, one saves BIG bucks. Case in point: At 48, I purchased a 110K policy and have to pay $116 per month. A toddler can have a 100K policy....with the same benefits as I...for under $30. THAT's why you have to be insured as young and as healthy as you can get! As a footnote, should the tragic moment ever happen where a child passes away, I know that I, the beneficiary, would feel immense guilt if I ever used the insurance money for anything other than the best funeral that could be provided (a final proof of how much love for the child) and donate the remainder money towards a cause that would be in honor of the child

Answer 3

There are two main reasons to buy Life insurance:

1) Create an estate, i.e. to provide for your survivors
2) Protect an estate (from the burdensome "Death Tax")

If the proposed insured has substantial liquid assets, the life insurance would probably not be necessary.

Answer 4

Let me turn this around. What is the purpose of life insurance?

Is life insurance for YOU or is it for your SURVIVORS, whomever they may be.

Of course, the answer is....your survivors.

Therefore, when your assets more than exceed your liabilities and income earnings potential for "x" number of years until your wife and children (survivors) are supported, you don't _need_ life insurance.

***Quick Aside*** What do you think of life insurance policies written for children? Again, what is the purpose of life insurance? Unless the child is supporting the parents or survivors and defies actuarial charts, it's not a wise decision.

...despite Gerber's attempts to make the emotional appeal to parents and grandparents to buy life insurance for the children.

Answer 5

Life insurance is not for you but for your beneficiaries. If you have none, then the only need for LI would be to clear up debts for whoever handles your estate. If none, then a final expenses policy is all that is needed, but those expenses can be easily covered with accumulated assets.

Answer 6

If after you die, your estate has enough money to 1 bury you and 2 provide for any minor children.

Answer 7

When you have sufficient assets to bury yourself, and no dependents.

Answer 8

when you have lots of savings built up and that no one is dependant on your income and you have no major debts left such as mortgage.

Answer 9

when you not married and don't have children it really isn't necessary

Answer 10

When one has a terminal illness.