Life insurance is one of those things that everyone needs, but very few people have. Only about 54% of Americans have life insurance, and 40% of them wish they had purchased their policies at a younger age. A lot of people are not thinking about life insurance in their 20s, even though this is the best time to get it.
Most people don’t fully understand the importance of life insurance. You see, life insurance is not for yourself, and regardless of how long you live, your loved ones will undoubtedly benefit from it. It’s important for you to live life to the fullest, but it’s also essential for you to be ready for anything, especially when you have other people depending on you.
Despite being relatively cheap, there are so many benefits of life insurance that it’s surprising why so many people don’t have it. In this article, we’ll look at 7 of the most vital benefits of life insurance to help you make the final decision to get one.
1. It’ll Protect the People You Love Who Depend on You
A majority of people have others who depend entirely on them. Think about your spouse, children, elderly parents, or siblings, some who may have a hard time surviving without you. As the primary breadwinner in your household, having a life insurance policy means that your family and loved ones will have a backup financial source in the event of your demise.
Consider the income your family would need in your absence. You may be the one taking care of schooling, housing, travel, food, and all other household necessities right now, but what if your income is no longer available? Life insurance is especially important for young parents who have much more to consider, including child care, laundry, cleaning, among other day-to-day tasks.
2. It’ll Guard Against Unforeseen Events
There is no way of telling what’s going to happen in the future, which is why you should not underestimate the importance of life insurance. It’s advisable to take the policy when you’re young. The younger and healthier you are, the cheaper the insurance premiums will be, so this is a win-win situation.
If you put it off too long, you’re likely to develop health issues as you age, and they will bump up the insurance premiums. In most cases, once you start your policy, the premiums don’t change, making it easier if you take cheaper premiums at a younger age instead of expensive ones at a later age. Still, you can get your insurance policy at any age, and even if you’re a senior, you should compare insurance quotes for seniors.
3. It Could Pay Off Your Debts
Apart from providing income for your dependents, a life insurance policy could potentially wipe off your debts and other expenses. Once you pass away, your family might be left with debts, such as car loans, mortgage, credit cards, and the like. On top of that, they will need to cater to funeral expenses and burial costs, which can potentially run into thousands of dollars.
The emotional burden your family and loved ones will be going through will be enough without having to think about the financial burden. The life insurance policy will, however, take care of your debt, and all these other expenses, leaving no financial burden on your loved ones. This reason alone is enough for anyone, even single people with no dependents, to get life insurance.
4. You Have a High-Risk Job
Life insurance companies closely consider occupations when assessing the risk level of a candidate. What this means is that if you work in a relatively dangerous industry or in a high-risk environment, you have a greater chance of passing away compared to people who, for instance, work in an office.
If you work in occupations like construction, aviation, mining, firefighting, and the like, you are more likely to have high insurance premiums. Of course, the high risks make having a life insurance policy worth it.
If you have a high-risk job, it’s advisable to get a short-term disability insurance policy as well. Your life insurance policy will not cover temporary loss of income if you ever get injured on the job.
5. You Love Extreme Hobbies
Some people are thrill seekers and have a penchant for extreme sports. If you’re one of them, having a life insurance policy is of utter importance. Insurance companies will also deem you as high-risk, and you may have to pay a lot more for your insurance premiums.
Extreme sports like scuba diving, rock climbing, and other similar activities put you at high risk of dying from unnatural causes. It’s imperative that you don’t keep this from your life insurance company. Once they find out after your demise, they have a right to decrease your benefits or deny them altogether.
Different insurance companies assess the risks associated with hobbies differently. You may have to pay a higher premium or pay extra annual fees for your policy.
6. If You’re Self Employed
Life insurance can be quite beneficial if you’re a small business owner. You see, if you set up a “buy/sell agreement” insurance policy, your stakeholders and employees will get paid even in your absence. It’s also possible you use your life insurance policy as collateral for a business loan, and the death benefit will pay the loan upon your demise.
7. It’ll Give You Peace of Mind
The future is uncertain for all of us, and knowing that your loved ones will be well taken care of even when you’re no longer with them can give you peace of mind. It may be sooner than you think, or it could take longer than you expect, but eventually, it’ll happen. While no amount of money can replace a person, your family will have the protection they could potentially lose in your absence.
You Now Know the Importance of Life Insurance?
What’s the importance of life insurance? A lot of people think that life insurance is just an inconvenience a salesperson is trying to shove in their faces. Other people think about term insurance and feel that they could lose their premiums if they don’t pass away during the coverage period.
If you fall into this category, you need to consider all these benefits that life insurance has to offer and avoid taking a gamble.
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