Single People And Family NeedsA single person with no children would only need life insurance to pay off outstanding debt and to pay final expenses. On the other hand a single person with children will need life insurance to protect the children in case of premature death.
Sufficient coverage is needed to provide for the children until the youngest one graduates college. A fund should also be set up so that the guardian of the children can pay for food, clothing and a roof over their heads.
A married person without children needs sufficient life insurance to replace the portion of the deceased spouses income that is required to maintain the same standard of living that they enjoyed while that person was alive.
A married couple with children should consider all the things the single person with children considers but these people should factor in the other spouses income and needs as well.
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Business NeedsThe shareholder of a corporation would get all the principals together and set up an agreement which enables the surviving stockholders to buy out the deceased stockholders shares from the heirs at a predetermined price.
The insurance on each principal will be the value of the stock owned. This agreement should be reviewed and updated each year. The policies more often than not will be owned by the corporation. In some cases the stockholders own the policies.
The situation with business partners would be similar to that of the corporation except that the policies will likely be owned by the partners.
If life insurance is bought on a key employee the amount would be equivalent to 5 or 10 years income of that key person.
