| If there is someone who would suffer economic hardship if you died, then the answer is yes... you need life insurance. Families with young children have a clear need for life insurance. If both spouses work, the loss of one income will cause the family immediate economic hardship and make it harder for them to realize future goals, such as paying for the children's' education. If there is only one earner, the need for insurance is also great, as the surviving spouse may not have the training or experience required to enter the workforce after the primary earner's death. Also, if one spouse works "inside the home" and doesn't bring in a formal income, his or her death will require the surviving spouse to hire child care, housekeepers and other professionals to help run the household - and that can be a significant new expense. If the surviving spouse's income is not enough to carry the mortgage, the family might be forced to give up their family home, and move into a less favourable living arrangement, adding to the period of loss the burden of adjusting to a knew, lower standard of living.
If you are married without children or single, then you may need life insurance to protect your partner or surviving family members against the costs associated with your death. Funeral expenses, probate (assessed against your estate) and administrative fees, outstanding debts, special obligations to charities, and federal and provincial taxes are costs that all of us must consider. And, they can add up quickly. Unless you already have sufficient financial resources, your survivors will probably need life insurance to cover these expenses.
What happens to your family, if you don't have life insurance?
Under any circumstances, the loss of a loved one is a traumatic experience. But, if your family is also left without sufficient money to meet basic living needs or prepare for future goals, they will have to cope with a financial crisis at the same time. Depending upon their current financial resources and ability to "get back on their feet" emotionally and financially, your family might be forced to move to a less desirable home or community, abandon education and career plans, reorder family priorities (such as the amount of time spent with the children) and, in general, cut back on the quality of life you have worked hard to achieve. Your family might even be forced to go into debt simply to pay the expenses, like funeral costs, taxes, and medical bills, that result from your death. A moment's reflection will tell you that the lack of sufficient life insurance coverage when a loved one dies can have devastating consequences for a family...consequences that can last for years.
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