Finances & Money

Why You Shouldn’t Go Without Life Insurance

It may not be a comfortable topic to discuss, but it’s an important one nonetheless. We’re talking about life insurance.

For some, life insurance is a no-brainer. But for others, it’s debated as to whether the premiums are worth the possibility of an unexpected death. But is it not better to plan for your family’s future rather than leaving it to chance?

We’ve laid out a few reasons why life insurance is not only necessary, but highly recommended.

If You’re Gone, Will Your Family Be Okay?

One of the biggest reasons for getting life insurance is to prepare your family in case the unexpected happened – death. Although we want to believe it won’t happen, it’s probably better to err on the side of caution and provide protection to those most affected by your death.

Life insurance can help replace the subsequent loss of income if you or your spouse were to pass away. This is especially important to consider if you are the primary income provider in your family. If your sudden passing would leave your family facing financial struggles, you should consider life insurance.

Pay Outstanding Debt

The last thing your family would want to worry about is the financial stress of funeral expenses while grieving for their loved one. By acquiring life insurance, if an accidental death were to occur, the money could be used to help cover the funeral costs.

But life insurance isn’t just used for funeral expenses. If you have a mortgage or other kinds of debt (loans and credit cards for example), life insurance could help cover those costs after death, as well.  Help ease your family’s mind by removing the stress of debt after passing.

Invest in Your Family’s Future

Life insurance can also be used to leave a cushion for your children’s future. Not only can it be used to pay any outstanding debts and expenses if you were to pass, but you can also set it up so your children would receive financial benefits. Certain life insurance policies will allow you to name your children as the beneficiaries, which is a way to protect their future.

So What Now?

If you’ve decided life insurance is needed to help protect your family, the next step is to determine which type of life insurance best suits your needs. There are two main forms of life insurance available: term or permanent.

Term life insurance is quite common and can be pretty affordable. Term insurance usually has a specified period (or “term”) before the policyowner must decide to renew or end the coverage. Term life insurance, however, does not pay past the term period.

If the death benefit remains unchanged throughout the policy, it is known as a level term policy. If the death benefit starts to descend over the policy’s period, it is known as a decreasing term policy.

The other common type of life insurance is permanent insurance. Unlike term insurance, this type can stay in force for your entire life as long as the required premium is paid. Because you’re paying premiums for your entire life, permanent insurance can be more expensive in the long run. However, payments can be divided between insurance costs and a continuously growing cash value—if a cash value accumulation feature is available.

So if you’re debating about whether or not life insurance is worth the premiums, ask yourself an important question: would your family feel the financial burden of your death while they are grieving your loss? If yes, then ask your financial professional about life insurance.

 

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Susan Paige

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