A couple with young children is probably the most in need of life insurance. This is because the number one reason why people buy life insurance in the first place is income replacement. It is one way of ensuring the future of persons who are totally dependent on the insured for living and survival. Through the death benefit obtained from the life insurance policy, the surviving spouse and the children are in a better position to weather the affects of the untimely death of the primary breadwinner or caregiver. This is both true for typical families and single-parent households.

When kids have grown, life insurance can still serve a purpose in other areas of living. One is to enable the family to meet goals even when children are in college or are completely financially independent. The proceeds of life insurance can help finish the job by providing for miscellaneous expenses such as room and board, laundry and entertainment activity costs. This is especially helpful since social security benefit payments for the surviving spouse and children stop when kids leave high school.

Death benefits obtained from life insurance policies can also support disabled adult children, parents and other people who depend on the insured for financial support. Life insurance continues this support in the event that the insured dies. It likewise creates a financial safety net that serves as an emergency fund that will enable a household to meet unexpected, unavoidable outlays.

Life insurance can be used to provide bequests to heirs and charities. It is particularly useful when no funds are available to meet this objective. The heirs are not forced to unnecessarily liquidate other assets and prevent hasty decisions that would result to having to sell properties and assets at a much lower price.

The death of a non-earning spouse in a family where there are children is no less straining since child care would be a very vital issue. Child care is very expensive and necessary where young children are involved. Life insurance provides the money to take care of such important expenses. The spouse working at home performs other valuable services such as household management, cleaning and cooking. Funds would be required to pay the cost of hiring someone to take care of these responsibilities.

Insurance needs usually increase sharply and remain relatively high once the children arrive in a family. This is the scenario until they become financially independent from their parents. A sole breadwinner for a large family with little savings needs substantial life insurance. In terms of priority, life insurance comes after basic food and housing even before retirement savings, auto loan payments or credit card payments.