Why Do I Need Life Insurance?
You need life insurance in order to ensure that your loved ones can cope financially with your loss. That's the bottom line.
The reasoning behind life insurance is most evident when you consider sole breadwinners, but applies to everyone who has dependents, even stay-at-home spouses. If you (as the stay-at-home spouse) were to suddenly die, your family would have to find other ways to: ensure care of children; get the family home cleaned; handle dry cleaning and laundry; do grocery shopping; and many other tasks which you currently handle. While your services appear to be 'low cost' because no one is paying you directly, if your family has to replace you with paid help you will quickly see your 'value'.
In addition, funerals are expensive. An average funeral can set you back between $8,000 and $10,000 considering the funeral home services, casket, burial plot and headstone. This is part of what you want to insure yourself against. You can bundle in these costs when you consider a life insurance policy's total benefit amount that you insure yourself for.
While you can buy life insurance policies which are a small amount suitable only to cover funeral costs, you will generally need much more life insurance than that. Many of these life insurance policies look good because of low prices, but you have to look closely. For the dollar amount of coverage you get, it is generally a more expensive life insurance policy.
Some people who are single or have no dependents might want to consider 'funeral coverage' only. For the rest of us, we should be looking at more substantial life insurance.
For more information regarding life insurance check out the following pages: Life Insurance, Why do I need life insurance, How do I decide what I need, What types of life insure can I get, Permanent life insurance, Whole life insurance, Universal life insurance, Term life insurance, Other types of life insurance and don't forget to check out the How can I reduce life insurance costs page.