Why is insurance necessary? The question contains the answer within itself. After all, life is fraught with tensions and apprehensions regarding the future and what it holds for the individual. Despite all the planning and preparation one might make, no one can accurately guarantee or predict how or when death might result and the circumstances that might ensue in its aftermath.

We are not saying that life and existence are constantly fraught with danger and uncertainty. But then it is essential that you plan for the future. The chances for a fatality or an injury to occur to the average individual may not be particularly high but then no one can really afford to completely disregard his or her future and what it holds.

People generally regard insurance as a scheme when and where you have to lose a lot to gain a little. Nevertheless, insurance is still the most reliable tool an individual can use to plan for his future.

• When you're single
  
  Sad though your death would be, it would create financial hardship for no one. Any honest financial assessment of your situation would have to conclude that you have little or no need for life insurance.
  
  But then, as you grow older you will be assuming new roles and taking on larger responsibilities too. Costs of living will rise and you will have to plan for your marriage, your children's future and many other interconnected expenses.
  
  So we recommend that you buy a policy now while you're young and rates are low. And if someone like a parent depends on you for financial support, then by all means consider life insurance.
  
  
• Double income no kids
  
  Married couples with no children may need little or no life insurance, especially if both spouses contribute equally to the household income. The death of either spouse would not be financially catastrophic; the other could presumably survive on his or her own income.
  
  Still, it could be a strain. Perhaps the survivor couldn't afford the rent payments on a single income, or maybe you have to repay debts. Each of you should probably buy a substantial amount of life insurance to protect one other.
  
  
• Married with children
  
  A single-income family with young children is the classic high-need situation. Basically, all of these people are dependent on one breadwinner for their total support, so insurance on that life is vital.
  
  And if the non-earning spouse should die, the other would have to pay for foster care - a very expensive proposition that argues for insurance on both lives. This same high-need situation exists for dual-income households with children, for single parents, and for anyone caring for elderly parents who have limited resources of their own.