Part of estate planning is ensuring you are leaving enough assets behind to cover your obligations. You probably don't want to leave your heirs with debts or other financial woes, and if you have minor children, you probably want to ensure they are taken care of if something happens to you. One of the ways you can do so is through life insurance, which is something many people should have. But when do you not need life insurance?
For some people, life insurance might be an unnecessary expense. While it can be a sort of investment, the base purpose of life insurance is to provide assets after you are gone to your estate or to your heirs. If you already have bountiful assets in the form of cash, investments or property, then you might not need a life insurance policy.
If you don't have any minor children or heirs, then a life insurance policy isn't always necessary even if you don't have plentiful assets. This is especially true if you don't have many or any liabilities – your estate won't need the life insurance and without any heirs, and the proceeds might just go to the state. If you do want to carry life insurance in such a situation, you might want to speak to an estate planning lawyer to find out how any leftover proceeds could go to a favorite charity or support a business.
One thing many people use life insurance for is to cover estate taxes. If you have an estate large enough that taxes might be a burden, make sure it is liquid enough to cover that burden. Otherwise, you might need life insurance as a backup. For more information on what type of estate planning you might want to consider, reach out to an estate law professional.
Source: Neptune Society, "Dispelling Myths About Life Insurance," Michelle Harris, accessed Aug. 19, 2016