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Life Insurance - protecting the family income

Many people live long lives, but some don’t. Besides the fact that we feel very sad when someone in our family dies, that death may affect the earning power of the family. To protect the family income and the future of the family, people buy life insurance.

Paying the bills

For example, let’s say that your dad is a firefighter and loses his life in a burning building. Your dad’s income is no longer there to help the family pay monthly bills. Yet the bills pretty much stay the same. Will your mom’s paycheck be able to pay those bills, now that the family has lost a salary?

Different circumstances

Think about this. How the family is financially affected by the death of a parent depends on when a parent dies.

  • If a parent dies with three children in elementary school, the living parent must face years of expenses for these children: clothes, tuition, braces, music lessons, sports, and college. There are lots of bills to be paid.
  • If a parent dies after the family’s children are adults, the living parent may be the only person left at home. The many bills that a family pays while children are growing up probably have been taken care of.

    Yet the living parent may still need money for daily life: staying in the same house and buying food, clothes, a new car, etc. Without life insurance, the remaining parent might not be able to afford his or her old way of life.

Can you see how parents think about life insurance? Parents hope they will not need to use life insurance anytime soon. But they buy it just in case – if a parent dies, the family will have enough money to go on living the way they always have.

As with all insurance, there are many kinds of life insurance. People can choose how much to buy, depending on their circumstances and their financial needs.