Life insurance do I need it or not has been made into a complicated conversation and yet, it is very simple.
Life insurance comes down to “income replacement.”
Is there anyone dependent on your income. If the answer is no, then you want to make sure you have enough cash to cover burial expenses so that burden is not left on friends and family.
If the answer is Yes. Then the question is do I have enough cash to take care of all of my families needs. For most, the answer is no. That is why it is being identified as “income replacement.” As a breadwinner, you want to make sure those left behind will have money to take care of them. And since you don’t have cash, you buy the life insurance as a “replacement” until you make the cash a reality or the reasons you needed it are no longer in existence.
By the way, once you accumulate the cash, you don’t need life insurance.
Yes, rich people have it but it is for estate purposes. Most people will never have this issue, so you just need to understand what was spoken above.
For kids, again remember “income replacement.” If they are not bringing in cash, then you want to make sure you have enough to cover burial and maybe some possible medical expenses (depending on your medical insurance). Again, if you have cash, then you don’t need to insure them.
If they are bringing in cash and the family depends on them. That becomes a different situation and “income replacement” becomes the conversation.