Maurer, in his Forbes article, summarizes what the average American needs to know about life insurance, why it is needed, when it is needed, and how it works. In short, it is a replacement income for the loss that a household experiences in a debt (Maurer, n.p.). This can include the costs of a funeral and burial costs, but also the loss of regular income that a household is dependent on. In the case of a spouse who is not earning at one point in time, it replaces the household income that could have been expected over a lifetime, or it replaces the costs required if that spouse was providing care to dependents (Maurer, n.p.).
It was surprising to realize that life insurance is not in fact an investment, but, as it sounds, a form of insurance. It ensures that the expectations of a household budget can be met if the breadwinner or a care provider in a household passes away unexpectedly.

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This has considerable application in my own life, as a married mother of three children. Neither I nor my spouse has taken out a life insurance policy. If something were to happen to either one of us, in addition to the trauma and grief, the additional costs of the death itself, the cost of loss of income and the cost of the additional help required for the now single parent are eye opening, and it is clear that the small cost of a term life insurance policy while the children are dependents can be an effective way to mitigate this.

This Forbes article was helping in understanding how life insurance can be a practical way for me to ensure that my family is not in financial trouble if I were to pass away unexpectedly. A term policy for the years where my children are dependents makes the most sense for my household.

    References
  • Maurer, Tim. “10 Things You Absolutely Need To Know About Life Insurance”. Forbes. (2016). Retrieved from: http://www.forbes.com/sites/timmaurer/2016/01/05/10-things-you-absolutely-need-to-know-about-life-insurance/#3419c8a43872