We are all about helping people make smarter decisions when it comes to life insurance, and that’s the intent behind this Life Insurance Basics series. We will keep these short and simple, and you will see we are very opinionated – we are cutting through all the b.s. out there and boiling things down to what you really need to know. Ok, on with the show:

Q: Do you need life insurance?

A: Maybe not. There are a lot of potential uses of life insurance but most of them relate to solving rich people’s problems. For the rest of us, the main purpose is to protect loved ones, and here are the four specific scenarios where it is a no-brainer:

  1. You are the parent of minor children. These kids are counting on you. ‘Nuff said.
  2. You share a household with others. Spouse/partner, kids, elders. They may not miss your bad jokes but they will miss sharing bills, household chores, child care and elder care.
  3. You are married, have a lot of debt and live in a “community property” state. In most cases, your debt dies with you and does not get passed down to your next of kin…UNLESS you reside in one of the nine states where your spouse may be required to inherit your debt: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin and sometimes Alaska (if you chose to opt in). It’s a complicated topic, but this article provides good information.
  4. You have a student loan with a co-signer and your lender is one of the few that doesn’t have a policy to cancel the debt upon death or permanent disability. Call your lenders and ask them about their policy – most will discharge the debt but some will not. If not, do your co-signer a solid and get enough coverage to offset the debt.

That’s it. If one or more of these describe your situation then use our free tool to get a personalized coverage plan that will save you a ton of money. If none apply to you, then cross life insurance off your list and don’t look back.

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