Our post 5 Reasons Everyone Should Have Life Insurance has been sponsored by Mason Finance. However, all thoughts and opinions are our own.
5 Reasons Everyone Should Have Life Insurance
I am often shocked when I discover how many people don’t actually have any type of life insurance policy. This is often because it can often be daunting to try and understand the difference between Term and Whole life insurance policies, as well understanding all the different varieties in these policies. However, it is very important for everyone to have some type of life insurance policy. Today, we will discuss five reasons that everyone should have a life insurance policy and provide tips to help you purchase a policy that is right for you.
One of the main reasons I hear people say that they don’t have life insurance is because they are young and don’t need it since they aren’t going to die anytime soon. This is absolutely false and leads us to our first reason why you should have life insurance and that is to Cover Burial Expenses. Anyone can die at any time and one accident can leave your loved ones struggling to cover the cost of funeral expenses. Even if families opt for a simple cremation with only a memorial service you are looking at costs starting around $2,000, depending on the location. This is often money that families don’t have available and even if they happen to have it, these costs can drain any savings they may have. This is also true if you have children. A child’s life insurance policy does not cost much but will make sure that you have the funds to cover their burial in the tragic event they die. Also, many child’s life insurance policies can be turned over into adult policies when they are of age, so you will be helping them get a head start in the life insurance game. By purchasing a life insurance policy, you insure that your family will be alleviate one of the main stressors when funeral planning.
Alleviating stress for your family brings us to the second reason you should have life insurance and that is for Peace of Mind. Planning a funeral is very stressful and often requires decisions be made quickly. Plus, this all must be done while going through the grieving process. By purchasing a life insurance policy, you are giving your family peace of mind as they make these decisions because they know that the money is there. Life insurances do not have to be for large pay-outs but even a small policy will allow your family a little breathing room during one of the most difficult time of their lives.
The size/pay-out and cost of life insurance policies brings us to our third reason you should have life insurance and that is Affordable Coverage. Most people don’t realize that the earlier you get your policy the cheaper it will cost you in the long run. There is also a chance as you get older and develop more medical conditions that you could even be denied coverage, while if you already have a policy they are less likely to dump you. This is the reason, I am such a strong advocate for life insurance. My husband and I both purchased policies in our early 20s, prior to us getting married because my parents had instilled in me the importance of being covered. Only a few years later, we would both find ourselves with medical conditions that would make us “uninsurable” for most life insurance companies. Plus by purchasing our policies when we were young and healthy, the cost of the insurance was lower. This still holds true for people purchasing life insurance today and premiums are based on the amount of your life insurance pay-out. If you are single without dependents, then a small policy to cover your burial and debts may be all you need. If you are worried about a life changing situation that might come up and alter your income, I recommend checking out how a retained death benefit settlement might help you tackle that issue.
The amount of coverage needed in a life insurance policy brings us to our fourth reason you should have life insurance and that is to Pay Off Debt. Many people don’t realize that when they die, their debt doesn’t necessarily die with them. If you have a spouse, co-signer, or authorized user on your loans, mortgages, credit cards, etc ; they could be held responsible for that debt. Also if you have any assets left when you die, these are applied to your debts unless you have coverage for those debts. Most loans, mortgages, and credit cards off death & disability insurance but if you don’t purchase it then your loved ones could be left holding the bag. Make sure when purchasing a life insurance policy that the pay-out amount will cover burial expenses and any outstanding debt you may have. You will also want to think about having coverage for other expenses your family may encounter when you die like college, medical bills, family budget, daycare expenses, etc.
This leads us to our fifth reason you should have life insurance and that is to Replace Lost Income. This is very crucial if you have a spouse, significant other, child, or family member that is dependent on your income to make ends meet. By insuring that your life insurance policy pay-out will provide them with at least a 6-12 month cushion, will give them a chance to reestablish a new budget or find alternative funds to cover the lost income. This is really crucial in one-income households, when you are the primary caregiver. A grieving spouse has enough on their mind and having to worry about how to keep the lights on and a roof over their heads should not be an added stressor. Take all of these factors into consideration when deciding how much of a life insurance pay-out you are wanting to purchase.
Now that you know why you should have life insurance, it is important to purchase the policy. You can check with your insurance agent for quotes and I recommend getting several quotes before purchasing. Be prepared to give family medical history, personal medical history, and other sensitive material as this helps them establish your risk and provide you with the appropriate coverage. Don’t let you family be left with the stress of planning and paying for your funeral as well as struggling to pay the bills in the event of your death, make sure you have life insurance for yourself, your spouse, and even your children.
Do you have a life insurance policy? What is the biggest reason you purchased a policy?