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CHAPTER 11

pay off any other types of estate costs? If the answer to the last ques- tion was no, then perhaps you should investigate some form of life insurance.

A good rule of thumb as to whether you need insurance focuses on whether or not you are married and/or have children. Generally, those individuals who don’t have children have a decreased need for life insurance. That’s not to say that just because you don’t have kids, you don’t need insurance. You might. But, typically, single people with no children are in no need of life insurance. Again, though, this really depends on your particular situation. Life insurance is designed to pro- vide financially for your dependents after you are gone. Therefore, if you have no dependents, you may not need insurance.

Likewise, as you grow older, your insurance needs change. For example, when you have younger children, your need for insurance is greater than after they have grown up and moved out of the house. At that point, they would no longer be your dependents, so you wouldn’t need to provide for them financially. Plus, as you build your assets, your need for life insurance should also decrease. This is because you would be more able to self-insure, and your dependents and heirs would be able to pay off any debts or estate costs by using money that is already there. But, if your spouse has already died, you may need more coverage. This will depend on what type of estate you have amassed. As you get older, you will also need to consider what types of retirement benefits you will receive, such as social security or pension benefits from your employer. These will also affect the amount of coverage you need.

HOW MUCH INSURANCE DOYOU NEED?

Now that you have established whether or not you need insurance, deciding how much coverage you actually need becomes your focus. Putting a price on your life may seem like an overwhelming task, but it’s important. While pulling a number out of thin air and using that as your coverage amount might seem like an attractive idea, you could wind up with too little coverage, which wouldn’t suit your needs. Or, you could wind up paying more than necessary because you have too much coverage.

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