Should You Get Life Insurance?
What exactly is life insurance? Life insurance is an agreement between the insured person and the insurance company, where the company pays a specific amount after the death of the insured individual, provided that the premiums are paid and up to date. Having this kind of insurance gives insured persons the peace of mind that their loved ones will have financial assistance after their demise.
Like many things, life insurance has different kinds that you must discuss with your chosen insurance provider and your family. Some insurance gives you cash value, while others only give a pay out if the insured person dies within a certain time frame.
Think you will miss out on having life insurance while you are still young and will not reap benefits if you don't get one soon? This is one big myth that some insurance agents lead you to believe. While it may be true that getting one while you are younger is cheaper, it does not mean that qualifying for getting a policy is easier. Fact is, insurance companies simply want higher premiums to cover all bases with older people, but it is very rare for any insurance company to refuse to provide coverage for people who are willing to pay the premiums for the risk category they fall under.
Having life insurance sounds like a good thing, but every one is not the same. While some grab the chance to make sure that their loved ones will be provided for when they die, others do not see the sense of the importance of having one. They may be thinking that they can provide the same security, if not more, for their loved ones in a different way. And there are also people who think that they do not need the extra expense if they are not the ones who will reap the benefits in the future.
The bottom line? Whichever one you fit in these categories, it is, and will always be your choice whether having life insurance is beneficial for you or not. As with many things, educating yourself is important when making a choice.
The Need for Life Insurance
Whether you are someone who thinks of life insurance as an investment or think otherwise, and you have already thought about other options and finally reached the conclusion that getting a life insurance is better, knowing what you need and what you are getting into is what matters.
If you are the one earning for your family, you need life insurance. When someone is relying on you financially, you must think about the day you die and when that income stops. When that income stops, the dependents you leave behind still has to pay for rent or mortgage, groceries, utilities, and all other expenses and bills. Having Life insurance, would mean having a replacement for your share of the household budget for however long your family needs it.
People have the greatest need for life insurance early in their adult lives when there are minimal financial assets coupled with high costs, such as child care, and significant debt, such as a mortgage. The unexpected death of a spouse at this stage of life would be financially devastating.
Do not have a life insurance need right now but you want to buy life insurance while you are younger, healthier and rates are lower? There is no problem with that. Getting one at this time of your life is very inexpensive that it’s almost like deciding whether or not to keep buying a cup of coffee.
Should you insure someone? Here's another thought that may have crossed your mind when thinking about getting a life insurance. Obviously, there are a number of people in your life who are very important to you, and thinking of getting them life insurance is natural.
Think about it this way, insure only the people whose death would mean a financial loss to you. Cruel? Not really. Here's the thing, if for example a child dies, however tear-jerking and emotionally crushing it is, it is not a case where a source of income has been lost in your family, because raising a child costs money. However, if an income earning spouse dies, you household budget will be greatly affected. The same thing goes for your business partners because you have a financial relationship with them. The death of a business partner with whom you share expenses and income with will have a huge impact on your financial situation.