It is always important for wage earners to have comprehensive life insurance. It helps protect dependents if they unexpectedly die. However, for the person who does not work, it is still important to choose a life insurance policy.
Are you a stay-at-home parent? Perhaps you do not work because your spouse does. Maybe a single income is all that you need in order to support yourself. Your life insurance policy should reflect your specific needs. Here are a few reasons why you should keep life insurance if you are not a wage earner.
You Are Contributing if You Care for Family
Some people do not work because they spend their days caring for others. You may be caring for your parents, children, a disabled child or someone else. This person relies on your care in order to live comfortably. If you are not there to provide this care, who will do so? This care provides value, even if it’s not in monetary form.
For example, if a parent has to put a child into daycare because the caregiver passed away, this can create a significant financial burden. It may be wise to consider investing in a life insurance policy to help cover these costs. How much would your family have to pay to provide this type of care? Ask yourself that question when you go on the search for coverage.
Consider the Cost of a Funeral
The cost of a funeral varies, but it is not uncommon for this charge to be as high as $10,000 or more.
Do you have a funeral fund set up? These funds can help to pay for your funeral should something happen to you. But, if you do not have the money, your unexpected death could be financially tasking to your loved ones. You can purchase funeral insurance coverage. However, it is also possible to purchase a smaller life insurance policy to cover the costs and provide a small death benefit to your family.
You Want to Leave Money Behind
Another reason to invest in life insurance as a non-wage earner is to be able to leave funds behind. You might want to pay for your child’s college education. Or, you might want the funds to pay down the debt on a home. Any of these benefits can provide a big relief to the now-single paycheck of your surviving spouse.
Discuss the benefits of life insurance with your agent. Talk about your contributions to the family and what your goals are. Most often, these are affordable policies. They can provide you with the ability to leave behind the funds your family needs to remain secure, even if you are not contributing financially today.
FAQ’s About Life Insurance for the Non-Worker: Why You Still Need Coverage
Why should someone who doesn’t work consider getting life insurance?
Even if you’re not working, life insurance is important as it can help provide financial security for your dependents. It can cover final expenses, pay off debts, and ensure that your family’s financial needs are met in the event of your untimely passing.
Can non-workers qualify for life insurance?
Yes, non-workers can qualify for life insurance. Insurers often consider other factors besides employment, such as overall financial situation, health, and lifestyle, when determining eligibility.
What type of life insurance policy is best for someone who is not employed?
The best policy depends on individual needs and financial goals. Term life insurance might be suitable for those seeking affordable, temporary coverage, while whole life or universal life could be better for long-term financial planning and estate considerations.
How much life insurance should a non-worker get?
The amount of life insurance a non-worker should get varies based on their debts, final expenses, and the financial needs of their dependents. A common recommendation is to have a policy that covers 10 times your annual income, but non-workers may instead consider the costs their absence would impose on their family.
What are the key benefits of life insurance for non-workers?
Key benefits include covering end-of-life expenses, providing a financial cushion for dependents, potentially serving as a savings vehicle (in the case of permanent life insurance), and offering peace of mind knowing that loved ones will have financial support.
Are there any life insurance policies that do not require an income to qualify?
Yes, there are policies that do not strictly require an income to qualify, such as spousal policies or guaranteed issue life insurance. The focus for eligibility is more on health and age rather than income.
How does one determine the value of a non-worker’s contribution to a household?
To determine the value of a non-worker’s contribution, consider the cost of services they provide, such as childcare, home maintenance, or elder care. Calculate what it would cost to outsource these services to understand the financial impact of their absence.
Can a stay-at-home parent get life insurance?
Yes, stay-at-home parents can definitely get life insurance. Insurers recognize the significant value of the work done by stay-at-home parents and offer policies to help protect their families financially.
What factors affect life insurance premiums for non-workers?
Factors that affect life insurance premiums for non-workers include age, health, the amount of coverage, the type of policy, and the length of the term for term insurance. Lifestyle choices and family medical history may also play a role.
Is it possible to get life insurance without a medical exam for a non-worker?
Yes, it is possible to get life insurance without a medical exam, known as no-exam life insurance. These policies can be beneficial for non-workers who may not have access to employer-provided health benefits or who prefer a more straightforward application process. However, they might come with higher premiums or lower coverage limits.