This is a question I get asked a lot, especially by young people. Even sometimes more elderly people ask if they really need a life insurance policy. Generally, my answer to just about all of them is that they do indeed need to have some sort of life policy in force.
It is a pretty obvious answer when someone is married, has children living at home, and is the sole breadwinner. Of course they should have a life insurance policy. If something unfortunate were to happen to them, their family would be left struggling to make financial ends meet. It would be entirely irresponsible of them not to have life insurance.
Why would someone in their 20′s who is single need a life insurance policy then? There are still costs associated with one’s passing. Sure, an individual in this situation does not have to worry about the financial well-being of anyone they left behind, however, why should anyone burden their loved ones with having to pay for all of their final expenses. Instead they can get a small term life insurance policy that will pay for things like their funeral, any last bills, etc.
The same could be said for a senior citizen with no children left in the house who is widowed or living alone. There still will be expenses that could be covered rather than left to be passed on to their loved ones.
Medicare is a government backed healthcare system for senior citizens and those with disabilities. It was established in 1965. The government realized that health insurance costs for senior citizens had the potential to skyrocket out of control. Medicare allows seniors to have health coverage when they are likely to need it most.
Although it does help with a lot of healthcare costs, Medicare does not cover everything. There are quite a few things that it will not cover. To provide a solution for these so called “gaps” in health coverage, the government setup Medicare supplemental insurance, many times called Medigap insurance. Unlike Medicare, Medigap plans are not administered by the government. They are issued by private insurance carriers. The plans that are offered, however, have been standardized.
Plans are labeled A through N. Medigap Plan F is the most popular of the Medigap plans because it covers all of the gaps left by Medicare.
People often wonder which plan is the best solution for them. There is no general answer. It really boils down to the unique situation each person finds themselves in.
For someone that is relatively healthy and living on a tighter budget, Medigap Plan F might not be the right solution for them. On the other hand, an individual with significant retirement assets can easily afford Plan F and may choose to select that option whether they are healthy or not for the added security it provides.