In 1943, Abraham Maslow proposed his hierarchy of human needs in a paper titled “A Theory of Human Motivation.” The need for security, according to this theory, is subsequent only to human physiological needs. As life insurance provides for this need, it is easy to argue that life insurance, in and of itself, is necessary. A more appropriate argument, however, is that financial security for your family is needed, while life insurance is one of several means to achieve that end.
The suitability of life insurance in meeting the need for postmortem financial obligations is largely dependent upon your particular circumstances. Are you married or single? Do you have other benefits that will cover burial? Are you wealthy, poor, or somewhere in between? A single, self-employed veteran like me has few financial obligations that will outlast me, and the Veterans Administration will cover costs directly associated with my death; your situation is likely different, so insurance may be a more attractive solution.
Objectively evaluating your needs is an excellent way to determine if life insurance is the right tool for you. Finding a life insurance agent who will help you analyze your family’s unique circumstances and tailor a plan that provides for your security can be invaluable. A great agent is one who can look at a person who doesn’t genuinely need life insurance and be forthright in saying so.
In such cases where you don’t need life insurance to safeguard your family, you may also manage to reap other rewards by investing in a policy. Whole life, universal life, and variable universal life policies are more than the standard gamble on your untimely demise; they also provide a stable financial investment to complement your current portfolio. This aspect of the insurance business can address your need for security of resources while you’re still living.
Life insurance may be the best option for many people to meet certain needs, but it is by no means the only solution. Considering that other avenues exist for assuring the security of your family after you pass on, it would be foolish to label life insurance as a necessity. If it were the singular vehicle for reaching the desired end, then it would be synonymous with the need itself, but such is not the case, and you would be wise not to allow yourself to be convinced otherwise, particularly by anyone who stands to make a commission by the persuasion!