Have you been wondering “Why is it important to buy life insurance?” then this is the right place to be as this post will take you through 10 great reasons why you should purchase life insurance.
Life Insurance safeguards your family and loved ones from the possible devastating financial losses that may befall them if anything happens to you.
It provides a path of financial security, that would enable them to pay off debts, manage living expenses, pay medical bills, and others.
Life insurance is just like establishing a financial plan for your family’s future. It is the same as your other big financial needs like purchasing a house, giving your kids a good education, and/or planning towards your retirement.
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Now you understand, let’s get started on the importance of buying life insurance and other vital points you should know.
Have a great read!
Why Is It Important To Buy Life Insurance?
The basic reason behind this is to make sure there’s money available for your loved ones after you die. Other reasons include:
To Support Your Loved Ones
Why is it important to buy life insurance? One thing you should note about life insurance is that it is for your loved ones not you.
Think of the situation that your family will be in if you die today. It is best you leave something they will use in staying afloat financially.
Pick an insurance coverage amount when you’re ready to purchase a life insurance. It can be from a few thousand dollars to $2 million. If you die while your insurance policy is still active, your beneficiary has the right to receive the money and in cash.
Your beneficiary is the person who receives the pay out. It can be your partner, adult children, or any other family member you trust. You could choose more than one beneficiary if you want.
Life insurance will ease their stress from financial burden. You consider buying now.
To Help Pay Daily Bills
Life insurance will help sort your family’s basic daily expenses, like groceries, car payments, and utilities.
Study from the 2021 LIMRA study shows that 63% of people confirmed that they purchased life insurance as a supplement to their income.
Ponder on the things your income takes care of. Imagine it suddenly wasn’t there, there will be a need to source for an alternative to pay for all your needs.
This is where insurance comes in. It will provide quick support to take away your family’s burdens.
To Settle Your Kid’s Education
Apart from taking care of daily needs, life insurance can settle your children’s education.
With the high cost of education obtainable today, your kids can fall back on the insurance pay out to further their education if you die.
Insurance can cover college fees if it is part of child’s dream. If not, they might be interested in learning a trade or engaging in another program that require funding. Insurance can take care of all.
This is one of the reasons as to why is it important to buy life insurance.
To Keep The Family Home Save
Do you want your family to stay indebted to paying rent when you pass away? That wouldn’t be a good one.
Life insurance has given you the opportunity to save your family home. With all the memories made in your the home, it shouldn’t be let to go down the drain. This can be devastating. Secure it by buying life insurance now.
As much as the home reminds you of a lot of events, don’t forget it is like the biggest expense in a family plan for your family to be allowed to cover all alone.
Life insurance payout can assist your family cover other debts such as co-signed debt that include car and student loans. Take this hook out of your family by buying life insurance in case something happens to you.
To Safeguard Your Retirement
Retirement is one of the family’s greatest and longest-term financial goals. If you pass away few years before retirement, life insurance can facilitate the good life you and your partner dreamed of together.
That’s why up to three in 10 people has proven to buy life insurance to a replacement to their retirement as stated in the 2021 LIMRA study.
To Protect Your Business
Most Americans (47.5%) are employed by small businesses, and about 30 million people own small businesses in the United States.
Business Building is one of the most credible ways of building a lifetime wealth for your family.
If you’ve strived hard to build your own business, life insurance can help keep it flowing if you suddenly die. The payout from your insurance policy can provide cash to cover all the financial needs of the business.
To Provide Money During Your Lifetime
This answers the question “why is it important to buy life insurance”. Permanent life insurance policies can support your finances during your lifetime as well as after you die.
Permanent life insurance covers you throughout your lifetime if your premiums are paid and it builds cash value over time.
If you wish to have a great life, you should make sure to buy a life insurance policy.
To Cover End-of-Life Expenses
The standard cost of a funeral is over $9,000, and the costs of residential care or medical treatment can amount to bigger bills for your family to pay. Therefore, you should plan for it.
Life insurance can help cover end-of-life expenses. The insurance policy designed for this purpose is the final expense insurance. The reason is that the final expense policies offers a little death benefit, normally about $35,000.
These policies are always very cheap. It’s also simple to qualify, and has no waiting period for approval as well as no medical exam needed.
To Leave An Inheritance To Your family
Are you thinking about “why is it important to buy life insurance?” Then this should suffice.
Life Insurance is one of the simplest and cheapest ways that can help you leave something behind for your kids or grandkids when you are no more to help them attend their own financial goals.
If you are a philanthropic person, life insurance can as well cover an inheritance you would want to donate to charity. There might be a few tax benefits depending on how you go about it.
Speak to your accountant, he/she can help you maximize the advantages that comes with your tax.
Check: The Benefits of Protecting Your Family With the Best Life Insurance
To Give Your Family Control Over Their Financial Future
This is one of the great reasons to buy life insurance. Your family can make good use of the money for all their needs and the good thing is that tax is generally free.
Different families have different needs and dreams. Life insurance basically provides options for your family when you are no more.
The term life insurance calculator will help to calculate a coverage amount if you are not sure of how much they’ll need.
Steps To Purchase Life Insurance
To buy life insurance, there’s the steps to follow:
- First, you should determine your goals and how much insurance you need to meet them and how much you can afford to pay.
- Learn and understand the insurance that can help meet your needs.
- Consider the initial premium payments, any potential increase in premiums over time, any added death benefits and any added living benefits that can be used before you pass away, make sure to pick the insurance policy type (or combination of types) that is suitable for your needs.
Make sure to work with a financial professional. The process will be made easier.
Why Do Most People Ignore Buying Life Insurance?
People ignore life insurance because of the following reasons
Life insurance is expensive
Most people think life insurance is expensive but it is actually three times lower than what they think.
Savings is better
Yes, It is good to save but life insurance gives one the opportunity to get greater amount of money later when they need it.
My Employer can cover me
People never think about what will happen when they leave their old job. Will your employer let you go with the coverage?
Related Resources
- Related: 5 Best Life Insurance Companies That Pay Out
- Read: When to consider buying life insurance
- Check: Tips for Saving Money on Life Insurance in Canada
- See: 4 Reasons Why You Should Get Life Insurance
- Discover: Things to Consider When Buying Life Insurance
- Check: The Benefits of Protecting Your Family With the Best Life Insurance
Summary
Why is it important to buy life insurance? This post has analyzed 10 reasons you should consider purchasing life insurance as well as steps to the buying process.
If you are among those who think life insurance is difficult, I’m sure your mindset must have changed after going through this content.
Buy Life Insurance today and protect your loved ones from bad financial situations. It’s something they will always be thankful for.
Hope this piece is helpful, share your thoughts in the comment area.
Enjoy!
