When it comes to insurance, some coverages are mandatory, like car insurance. In most states, you cannot drive without having a minimum degree of liability insurance. You also must decide which additional forms of protection (such as collision insurance and comprehensive insurance) you need on top of that.
Life insurance is different, though. It’s always optional, and many people wonder each year if they need this extra protection. In particular, those relatively young and healthy often wonder if they should even bother with life insurance. However, the truth is that life insurance is important for everyone regardless of their age and health.
Unfortunately, one of the key reasons most people need life insurance is debt. Most of us spend most of our lives balancing various kinds, and we take them confident in our ability to pay them off in time. But in the event of your untimely death, some (if not all) of your debts will pass on to your family. This could create a major financial burden.
Even younger people without dependents should consider life insurance in certain circumstances. For example, if your parents or others helped cosign any of your student loans, life insurance can help them pay those debts off in the event of death.
Create an Inheritance
If you have dependents, it is natural that you want to leave them an inheritance. However, doing so is usually easier said than done.
After all, a traditional way to leave an inheritance is to invest in the stock market. But such investments are always a gamble. All it takes is some unexpected market volatility or a crisis (like the unexpected housing crisis of 2008) to nullify such an inheritance potentially.
Because the stock market is such a gamble, many parents and grandparents look to life insurance as a way of leaving an inheritance. This provides an easy way to know exactly how much money you are leaving behind for others, and you can split death benefits however you wish.
As a bonus, the inheritance created by life insurance is typically not taxed until it is awarded to your heirs. That makes this an easy and relatively seamless way of creating and customizing the perfect inheritance.
Help With Retirement Planning
At first glance, life insurance and retirement planning may not look like they go well together. However, it’s possible to take out life insurance policies that create a kind of cash value over the lifetime of coverage. And as this cash value grows, you will gain several options that potentially make retirement planning that much easier.
For example, it’s possible to withdraw cash from the policy to help supplement your income during retirement. Or you can take out some of that cash value as a loan that you eventually pay back. It’s even possible to put some of that cash toward long-term care services you may need as you get older. And the extra money you bring in can help supplement existing plans such as Medicare Health Insurance.
A Financial Future for Your Family
Depending on the age of your children, you may not realize the full potential of a good life insurance policy. In fact, it’s not overstating it to say that such a policy is one of the best ways to create a financial future for your family.
For example, a life insurance payout can help send your children to college and make sure they get the health insurance they need. That is especially important because the cost of tuition gets higher every year. Nonetheless, your children may need to earn a college degree to maximize their potential earnings.
Beyond the cost of college, though, a life insurance payout can help your children in other ways. Such money can help to pay for their dream wedding ceremony. Alternatively, these funds can help a child open the business they have always dreamed of.
Best of all is the peace that comes from knowing you can help protect your children even after being gone.
Taking Care of End-of-Life Expenses
Preparing for death means more than preparing your mind and body. It also means getting ready for the various end-of-life expenses that come with dying, so they don’t get passed on to your family.
What kind of expenses? In general, your funeral service, burial, and headstone can easily add up to a $10,000 bill. Without proper end-of-life planning, that is a major bill that will be left to your children and/or spouse to take care of.
But if your children and spouse are beneficiaries of your life insurance policy, they will have the money they need to take care of these bills. Also, it can help make the end-of-life paperwork easier.
Protection for Your Business
Do you own a business? If so, you should strongly consider getting a life insurance policy to help protect that business beyond your existing business insurance plan!
This is most important if you are a partner or co-owner on some joint business venture. If you should unexpectedly die, it may leave the other partners or owners in the lurch and threaten the stability of the business.
On the most basic level, having life insurance means you can provide some additional financing to your business in the event of your death. And this money can help keep things afloat while the surviving partners and owners try to get things back to normal.
A more advanced option for partners or owners is to take out life insurance policies equivalent to their share in the company. This provides enough money for survivors to buy out the shares from the deceased’s heirs and avoid any unwanted legal complications.
If nothing else, taking out certain life insurance policies (such as whole or permanent) gives you the money you can borrow whenever your business needs it.
Expecting the Unexpected
The main reason that most people hesitate to get life insurance is quite simple: they are not expecting to die anytime soon. But everything from car accidents to extreme weather such as tornadoes can take your life at any point.
In other words, as morbid as it is to say and as shocking as it is to hear, any one of us could die at any time. And your death could leave your spouse and children reeling financially at the same time they are reeling emotionally.
With life insurance, you can prepare for the unexpected while securing the future for your family. And this brings the kind of peace of mind that simply has no price tag.
Genuine Peace of Mind
By taking out a life insurance policy, you are doing more than making sure your family has the coverage they deserve. You are also making sure you don’t have to spend time stressing out over what will happen after you die.
Ultimately, life insurance is beneficial because it does more than help us prepare for the unexpected events of tomorrow. It also allows us to get the most out of every day, starting with today!
Getting the Right Life Insurance Policy
Now you know why life insurance is so important for you and your family. But do you know where you can get the coverage you need at the rates you deserve?