What are some special considerations for buying life insurance?

Special life insurance considerations

Life insurance is something to consider for individuals in all stages of life, and for many different reasons. Individuals should consider purchasing life insurance if they have dependents – children, disabled adult children, or others who depend on them for financial support.

Two-income households, even without dependents, should also consider life insurance, as financial commitments are usually made with both incomes in mind and the survivor may not be able to meet obligations with just one salary.

Life insurance is typically purchased to replace lost income or earning power, and traditionally, this is not something that children contribute to a family. However, some individuals purchase life insurance policies for their children, to cover costs associated with burial expenses.

Others purchase whole life insurance for their children to ensure that they are covered by an insurance policy, even if they suffer an illness that would otherwise prevent them from qualifying for coverage later in life.

In addition to the basics of life insurance coverage, consumers who purchase whole life insurance can also buy burial insurance. This is a policy that pays a small amount, usually between $5,000 and $25,000 to pay for funeral expenses, either for the insured or everyone in a family. This type of policy does not require a certain health status.

The amount of the death benefit is tied directly to the amount of the premium, which is often paid weekly, but can be paid monthly, and is also based on the current age of the insured individual. This insurance can be purchased through a life insurance agent or company, but in some states is also sold by funeral homes. Instead of burial insurance, some people choose to pre-pay funeral expenses.