Considering the primary reason for getting life insurance, people who do not have love ones dependent on them for financial support theoretically do not need it. It is comparable to buying an auto insurance policy when no car is owned or driven. In essence, when there is no responsibility to provide adequate financial resources for anyone as long as they’ll need it, then life insurance is not considered necessary.

There are several types of insurance that are not considered necessary whatever the status in life people may be in. Guaranteed-issue policies that have higher premiums because medical exams are not required should not even be considered by healthy people. Credit card, mortgage or car loan insurance can all be very expensive which can be substituted by adequate Term Life Insurance policies to cover all debts. There are other unnecessary insurance policies that are actively marketed to those who don’t need them. That is why it is very important that people deal only with licensed life insurance agents that show sensitivity to every customer’s situation and circumstances. This is critical since there is no such thing as a life insurance that fits all.

In determining how much coverage is right for an individual, one of the best approaches to use is the Life Insurance Survivor Needs Analysis. This approach is based on replacing an amount of income needed for the surviving spouse, children and other loved ones. The survivor’s needs are compared to their assets, existing life insurance and income sources to determine any additional life insurance requirements. Another useful approach is based on Human Life Value. It ensures complete and full insurance by incorporating the value of everything that might be provided for the family over the course of the insured’s entire lifetime. The Rule of Thumb Method is an often used approach which is based on a specific multiple of a person’s annual income. The disadvantage of this approach is that there is no rule of thumb which can tell with any degree of certainty how much life insurance is needed, since everybody’s financial situation is different.

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