by D. Lowell Brown

Created on: April 30, 2009   Last Updated: May 03, 2009

Your needs for life insurance will fluctuate continually throughout your life. When you get married, they change, when you have kids they change, when those kids leave your home they change. Your life insurance needs are somewhat dictated by these events. Professionals in the insurance industry sometimes call these "life events" because of the nature of the changes these events bring. It is likely that if your home is paid for, your children have left home, and you have no other significant debt. So the real question becomes, if you owe nothing on anything, do you still need life insurance. The answer? Well, it's a matter of perspective.

Why did you buy life insurance in the first place? Was it solely intended to pay off your home in the event of your demise? Or, was it partly because you wanted to make sure your family was taken care of and you wanted to leave them a legacy? Most people will answer that they bought life insurance for a little of both of the above reasons. With your home paid for, your needs change, they don't necessarily disappear.

Ask yourself a few questions. Is my funeral arranged for and paid for? Am I happy with the inheritance I am leaving my family? What do I want to leave behind?

With funeral costs increasing each year, it's hard to know exactly what amount of money will be needed to pay for one. If you have set aside a sum of money, make sure you add to it each year so that you don't leave your family holding the bag.

Think about your family. Are they doing OK financially? If so, good job, you must have taught them well. More than likely though, especially in today's economy, some of them are struggling. You would like to help them, but you don't know if you can afford to do so.

Would you like to help pay for your grand children's college? Would you like to set up a scholarship fund at you alma matter? There are a lot of good things that can be done with your money when you are gone. The only question is, how far will it go?

Instead of worrying about these things, invest in some life insurance. It may seem expensive, but the truth is, life insurance pays for things for pennies on the dollar. Not dollar for dollar like your savings and retirement. What does this mean? Consider this, if you bought a thirty year term life insurance policy with a $500,000 death benefit when you were 45, by the time you are 75 you might have paid close to $90,000. Wow, that's a lot of money! Just for fun, let's suppose that you carried this policy to maturity and on its last day, you passed away. You're family will get $500,000 for your $90,000. So now, if your spouse pays for your funeral with money from your life insurance, every dollar spent only cost eighteen cents. Make sense?

You may leave behind all the money you have saved, and all the assets you own, but why not augment that with some dollars that only cost cents to buy? It is a smart move financially. Do you need life insurance once your house is paid for? I think so.

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