MG ⚡

WHO DOESN'T NEED LIFE INSURANCE There’s a myth that everyone needs a life insurance policy. Life insurance isn’t designed to enrich someone on your death. Its primary purpose is to compensate your dependents for the loss of your income in the event of your untimely death. Here are four categories of investors who don’t! 1. No income Are you a student, a college pass-out preparing for competitive exams or a person who’s quit her job to pursue personal interests? Then you have no need for a life insurance policy. A life insurance cover is intended to ensure that, in the event of your death, folks who depend on your income are not left financially unsupported. Therefore, as long as you have no income and aren’t contributing to your family finances in any way, there’s no need to have a life policy. 2. No dependents When thinking of life insurance policies as an investment, most folks forget that the pay-out from the policy will not come to them but to their chosen beneficiaries. If you have no dependents whom you need to support, you don’t need a life insurance policy either. Young folks who have just signed up for their first job may not need life insurance at all, as long as they are single and their parents and family members do not rely on them for financial support. Folks in their late 40s or 50s may not need a life cover if their children are already independent and their life goals- such as owning a home or the surviving partner’s retirement needs – are already funded by their investments. The only exception to the above cases is if you have outstanding loans or liabilities that your family or spouse will be saddled with, in the event of your death. In this case, a life policy that will cover your debts in full, will ensure that their finances aren’t burdened by your loans after your passing. 3. Retirees If you’ve bid goodbye to a successful career and are currently enjoying a comfortable retired life with your retirement benefits, you do not need an insurance policy. Many people do sign up for life insurance at an advanced stage in their careers because the idea of their spouse or dependents receiving a big payout on their death seems reassuring. But the cost of buying a new policy at a late stage in your career is prohibitive. Given that insurance companies are well aware of higher mortality rates beyond 60, they budget for this in your premiums. 4. Comfortable net worth The final category of folks who don’t need life insurance are those who have a large enough net worth to live off their investment income (or passive income). There’s no point in shelling out additional insurance premiums annually in such cases, as the transmission of your wealth to your beneficiaries will be enough to take care of their needs. #lifeinsurance