Life Insurance: To Buy or Not?

Life insurance provides relief to the people you leave behind. Though most companies try to make it affordable, it can seem like an unnecessary expense when you’re young and probably not going to die. Still, it makes sense to think about what your life means to others and how they’d be able to manage without you. Get insurance quotes from a few different companies and choose the policy that makes the most sense for you if you need one.
Why Get Life Insurance
If you were to die, the life insurance company would pay an agreed-upon amount of money to your survivors. In many cases, this money can be essential to their comfort. For instance, it could allow a stay-at-home mom to continue to pay the bills while she figures out a new source of income. It could cover the college expenses of your children, or pay for your funeral expenses so that your death doesn’t become a financial burden to others.
Who Really Needs It
Parents are the people who need life insurance the most. The loss of one parent’s income can be a devastating blow, especially on top of the loss of the parent. Anyone who is the breadwinner for a family should have a life insurance policy. However, it’s important not to neglect the important contribution that the other parent makes to the family. For example, if the stay-at-home parent were to pass away, the working parent would need to plan for the expenses of childcare and might spend more money on eating out because there’s no time to make a home-cooked meal. If both parents were to pass away, the new guardians of the children would need this money to help with the cost of raising the children.
Even parents of young adults may want to consider having a life insurance policy, even if the children are mostly self-sufficient. Though it’s natural for children to outlive their parents, many parents want to be able to help their adult children out with certain expenses, like a wedding or a down payment on a house.
When You Don’t Need It
Any single person is not likely to need a life insurance policy. Though there are definitely people in your life who would miss you, your death is not likely to cause anyone else financial ruin. Married couples without children may also be able to pass on life insurance. This is especially true when each person contributes roughly the same amount of money to the household income.
Even parents of young children might decide that they don’t need life insurance when their amassed wealth is enough to provide for the family. The purpose of life insurance is to take care of the family in times of death, but if the money wouldn’t make a big difference in their life, it may not be worth the cost of the premiums.
Affording Insurance
The greater the amount of the insurance policy, the higher the insurance premiums will be. Sometimes, a family that’s struggling to make ends meet find it disheartening to see the monthly cost of an insurance policy that would adequately meet their needs. This is why it’s extremely important to shop around. Another company may be able to offer lower rates. It’s also possible to sign up for an amount that’s affordable, even if it isn’t the ideal amount for the policy. For instance, a $250,000 policy might not be as good as a $1 million policy, but it could still help out for a few years while the survivors get back on track. Shorter terms can also make a policy more affordable.
Other Things to Consider
The premiums for a life insurance policy increase with the increased chance of death. This means that premiums go up as people age, but they can also increase after certain life-threatening events like cancer or a heart attack. Fortunately, the rates don’t go up for the term of the policy. When you choose a 10-, 20-, or 30-year policy, you’re locking in those rates for that amount of time. For this reason, a young person may find that purchasing a policy is a good idea, even if there is no one who might need the money in the event of a death. When he later gets married, his rate will continue until the term is over. Choosing a life insurance policy is an important decision that starts with accurately assessing your individual needs when it comes to a policy. Once you know this, it’s easier to compare the options.

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