There are nearly 6,000 insurance companies in the United States. With that many companies, you are bound to have seen an advertisement for all different kinds of insurance.
When we think insurance, we generally think of health, car, or homeowners. But there is another type of insurance that is just as important; life insurance.
Often we wonder why insurance is needed.
Many people don’t think that they need life insurance since it won’t be used in their lifetime. There is a common misconception that this type of insurance is not worth the money.
But we are here to tell you that is wrong and that everyone needs life insurance.
Why Insurance Is Needed
While the need for life insurance may not be readily apparent for some people. Practically every person can benefit from having a policy in place.
It is also important to remember that a life insurance policy is not really about the policyholder. Instead, it is about their loved ones and set them up for success in the event of a death.
Here are five reasons why you do need life insurance.
1. Protects Dependents
The first and most common reason that people decide to get a life insurance policy is to protect their dependents. A dependent can be anyone who relies on you physically or financially. This can be children, disabled family members, or elderly parents.
A life insurance policy allows you to name the beneficiary who will receive a set amount of money upon your passing. This money can be used for whatever expenses to keep them going.
The amount the policy is for needs to be determined based on the current lifestyle and needs of the family. It’s almost as if you’re asking what is my whole life worth?
Insurance companies can help you determine what this number should be based on how long you want to support the dependents.
A life insurance policy is even important for a stay-at-home parent with no income. The care of the dependents will have to be outsourced and so the money from a life insurance policy can help cover that.
We work hard to protect what is important in life and so we should do the same when we are gone.
2. Covers Immediate Expenses
When there is a death there are immediate expenses that must be taken care of. Medical care, funeral, and burial are some that commonly come up.
Dealing with a death in the family is already a lot to deal with mentally and emotionally. Adding extra expenses on top of that can just be too much.
Not to mention that these immediate expenses are not cheap either. The average funeral can cost anywhere between $7,000 and $12,000.
Depending on the terms of the life insurance policy, that money can be distributed quickly and used to cover these costs.
Being able to take care of these things is also a reason for those without dependents to get a life insurance policy.
3. Increase Your Financial Security
A less common reason that people get a life insurance policy is to have more financial security.
Having a life insurance policy ensures that your loved ones will not be given the hardship of taking over your financial responsibilities. This knowledge sometimes gives people the power to take more financial risks.
This may look like investing in starting a business or other major purchases.
A life insurance policy can be used to pay off debts acquired by these investments that would otherwise be put on the dependents.
4. Gives Time And Prepares For The Future
As discussed a little bit earlier, a life insurance policy is not for the policyholder but instead for those loved ones left behind.
When the beneficiaries are given the money from the life insurance policy they then have the time to figure out what their next plan is going to be. The dependents will not have to rush out and find employment or make any hurried decisions.
With a life insurance policy, the survivors can take the time to grieve and process what has happened.
A life insurance policy can also take care of dependents in the future. Some of the policy money can be set aside for the college funds, home down payments, weddings, or whatever is the future plan.
5. Gives Peace Of Mind
Arguably one of the biggest benefits of having a life insurance policy is the peace of mind that you get.
No one knows what is going to happen in the future and that unknown can be a major source of anxiety, especially when there are dependents involved.
A life insurance policy gives families the power to be in control of their future. There is confidence in knowing that when problems arise, the money will not be one of those problems.
They can continue to live their lives the way they normally do, in their home and with their activities and lifestyle.
Peace of mind is a priceless gift.
Life insurance is often an overlooked or avoided conversation. It is uncomfortable to think about the circumstances that would lead to having to use an insurance policy.
But those situations do come up and that is why insurance is needed. Death is often unexpected and can really uproot a family. Life insurance policies can ground a family and keep them moving forward.
The process of getting a life insurance policy is not as complicated as many think. They are also often less expensive than many people estimate.
The benefits of getting a life insurance policy can greatly enhance a life and ease anxieties.
Contact your insurance broker today to get the process started for a life insurance policy!