I asked this question of my #MoneyChat FAM and received a lot of different responses. We are always told yes, EVERYONE should have life insurance. I certainly have been preaching this from DAY 1. I base this on my own experience and other’s stories of seeing family members pull money together for a loved one’s funeral who didn’t have money set aside for their own burial. Or hearing how a husband or wife was left to take care of a family alone – a life insurance policy would at least ease the financial burden while they mourn.
So, if you think you don’t need life insurance, have you thought about what happens when you do pass away? Will your loved ones be able to bury you? Will your significant other be able to afford to run the household in your absence? What about your kids (if you have any), will they be okay? I know we don’t like to think about death, it’s a tough subject. But it’s real and better to be prepared for it than not. So.. does everyone REALLY need life insurance? I still say yes and here are a few reason why:
Insurance Pays Your Debts
If you have any debts, such as student loans, a mortgage, or a car loan, your life insurance will help cover those bills. Your Will (something else you need!) helps outline what to pay. You don’t want to put those on your co-signers or your significant other. The best way to avoid unnecessary stress to your loved ones is to prepare ahead of time and provide instructions on what to do.
To Take Care Of Your Loved Ones Financially
Everyone wants their loved ones to be financially secure right? Well with life insurance, they will be! Granted, you could also leave a 401k or Roth IRA in their care, but a life insurance policy can cover gaps and even extend the life of your money. Your loved ones will miss you, but at the very least they won’t have to worry about bills falling behind.
It’s Not Expensive (Yet)
Did you know that the older you get, the more expensive life insurance gets? As you age, you may encounter health challenges as well that will affect the cost of your policy. While there are policies that overlook your age and health, there are many more who consider them an integral part of covering you. To be honest, the insurance business is… well a business. Why insure someone for cheap if they may pass in a short amount of time? It may sound harsh, but no company wants to pay out if you haven’t been paying in. That’s just the truth.
When you are young and healthy, life insurance is cheap. You can most likely get life insurance for around the same price of renters insurance, or even cheaper. It goes up over time, but still remains affordable if you remain healthy, non-smoker, not a heavy drinker, etc.
You’ll Be Covered For Years To Come
As long as you don’t let your coverage lapse, you can keep your life insurance as long as you want. You can always change it too, but if you are happy with your policy, there’s no need to change! Stay on top of your payments, review your documents every few years and make sure everything that you want or need to be covered is covered. As your life changes, you can add riders to the policy for a new mate or new child.
Of course, every life insurance policy is different. Remember to talk to your advisor, or use an online calculator to figure out what the best policy for you would be.
A Few Tips:
- Get at least 3 – 5 quotes
- Even if it’s a little more expensive than you really want to pay, make a way to afford it. It’s much more expensive for your loved ones if you DON’T have it.
- If you are just getting started, please go with a simple term life insurance policy no matter what the agent says. It’s cheaper, it’s simple. You can play with policies that invest money for you that you can withdraw or living insurance policies later – maybe.
Life insurance is necessary, but it doesn’t have to be hard, or expensive, to get. Don’t wait until it’s too late to make sure you, and your family, are taken care of.
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