When you’re feeling happy, healthy, and positive, the last thing you want to think about is life planning. According to LIMRA’s 2020 Insurance Barometer Study, it’s estimated that just over 50% of people in the US have one form of life insurance – but what about the other half of the population?
Life insurance isn’t something that anybody particularly looks forward to getting sorted. And many people, especially young people, think that they don’t need life insurance for the time being. But putting off getting life insurance can be detrimental to you in the long run.
Let’s take a look at why life insurance coverage is so important, regardless of your age.
Why You Need Life Insurance
Your Children Rely On You
If your children rely on your income to survive, getting life insurance is essential. A life insurance policy can cover factors such as your children’s education or your home’s mortgage, ensuring that your family will be taken care of if you die.
If you don’t already have life insurance, ask yourself whether your partner is financially prepared to give your children the upbringing you want them to have if you’re not around. If the answer is no, it’s worth looking into a permanent life insurance program, like universal life.
You Have Pre-Existing Medical Conditions
Most people have put off the idea of taking out a life insurance policy if they already have a pre-existing medical condition. But, of course, having pre-existing conditions makes it all the more important to protect your family with a life insurance program.
While life insurance companies might charge more for a policy if you have a pre-existing condition, in most cases, you will still usually have plenty of policies to choose from.
You Want to Build Cash Value
There are two common types of insurance planning to choose from: term life insurance and permanent insurance. While term life insurance is only in place for a shorter period of time, permanent life insurance policies will continue unless you cancel them.
With permanent life insurance, you’ll have the option to build cash value throughout the policy. This means that, should you have a financial emergency while the policy is active, you can tap into this extra financial cushion when you need it.
You Own a Business
If you’re the owner of a business, having life insurance means that your hard work won’t go to waste after your death. Ensuring the necessary financial security is in place will protect your business and your employees, if you have any.
It’s even more important to have a life insurance policy if you run your business with a partner. That way, if one partner dies, the other won’t be left with a hefty financial responsibility.
You Plan to Diversify your Investments
If you want to broaden your investment opportunities, you can use universal life insurance policies that are connected to a certain type of investment product. Based on the performance of this product, you may even receive dividend payments.
It’s important to read up on this type of insurance’s terms and conditions and get a full understanding of your risks before you make a decision. A financial advisor can assist you with universal life insurance policies if you feel you could benefit from the support of a professional.
You Want to Pay off Outstanding Debts
Unfortunately, most debt doesn’t disappear when you die. If you have co-signed debts with your partner, these debts will become the sole responsibility of your partner to pay off when you’re gone. Alternatively, creditors could collect what they’re owed from your estate, leaving your loved ones with whatever remains.
If you want to pay off your debts after your passing, life insurance can take care of these responsibilities. Typically, secured debts, such as mortgages, will be the first to be paid off by your insurance, depending on the policy terms.
Life Insurance: The Real Reason Why You Need It
There are many reasons why you need life insurance, but at the heart of it, this form of insurance is about looking after the people you care about the most. Nobody can predict the future, and life insurance can give you peace of mind that you’re prepared for any eventuality. With adequate insurance, your dependents will be taken care of if anything is to happen to you.
Buying life insurance isn’t as daunting as you might think. There are various types of life insurance premiums, but insurance companies are usually good at explaining their terms in simplistic language.
Visit comparison sites and generate life insurance quotes if you want an idea of what you can expect to pay. Do your research and decide whether term life insurance policies (for a certain period of time, like 20 years) or permanent insurance policies are the better options for you.
Affordability is an important factor for any life insurance policy, but there are other things to look out for, too, such as the length of the coverage, whether you want a joint policy or a single one, what the policy covers, and how much insurance you need.
If you’re uncertain about your life insurance policy choices, you don’t know what type of life insurance to opt for, or you want to be certain you’re getting appropriate coverage, a financial advisor can help you to make this important decision.
This article is intended to assist in educating you about insurance generally and not to provide personal service or advice. It does not take into account your personal characteristics such as budget, assets, risk tolerance, family situation, or activities that may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs
Variable Universal Life Insurance/Variable Life Insurance policies are subject to substantial fees and charges. Policy values will fluctuate and are subject to market risk and to possible loss of principal. Guarantees are based on the claims-paying ability of the issuer.