Published On: Sun, Jan 19th, 2014

Why You Need Life Insurance

You may have health insurance, homeowner’s insurance and car insurance, but when it comes to life insurance, you may have dropped the ball. I’m amazed by the number of people who think they don’t need a life insurance policy, or feel that they have all the time in the world to purchase coverage.  While no one wants to think about death, understanding the benefits of a life insurance policy can save your family from undue financial hardship.

If you do not know much about life insurance, you should at least learn why you life insurance is needed.  Chances are, you need a policy much more than you think.

  1. Funerals aren’t cheap.
    If you don’t have a life insurance policy, how is your family supposed to bury you? The average cost of a funeral and burial today is over $6000, and if you don’t have a policy, your family has to go into their pocket to pay this expense. Is that fair? Like most people, you may feel that you don’t need a policy because you’re single and don’t have any children. In this situation, you may not need a large policy, but you definitely need something. If you have a life insurance policy through your job, this may be enough. But if not, consider life insurance protects your familysupplementing with a term or whole life policy.
  2. Maintain standard of living.
    As the primary breadwinner of your family, could your surviving relatives maintain their standard of living in your absence? This is a question you need to ask yourself. Too often when a husband or wife dies, the family is forced to sell the home and modify their way of living. Losing a family member is traumatic enough, the last thing they need to worry about is finances.A life insurance policy can relieve any financial worries, if only for the moment. This gives your family adequate time to grieve before they have to think about the next step.
  3. Provide long-term support to children.
    Getting a life insurance policy not only cares for your family’s immediate needs, it can also provide long-term support for children. For example, you can take out a policy that allows your family to use funds for your child’s education. Do you have a daughter? Maybe some of the funds can go toward her wedding.
  4. Take care of your debts.
    If you finance a car or house, you can request supplementary insurance that will pay off this debt in the event of your death. Unfortunately, many people don’t take advantage of this provision. With regards to debt, death does not wipe the slate clean. The bills will continue to roll in and your family will have to deal with your creditors – hence, another reason to take out a life insurance policy. The family can use funds to pay off any existing debts in your name.
  5. It’s affordable.
    If you’re relatively healthy and young, you can get sizable coverage for less than a meal at a restaurant. For example, a 30-year-old non-smoker male in good health might be able to secure a $250,000 policy for just $25 a month – talk about cheap coverage.

Regardless of what you may hear from others – or what you might think – you need life insurance. The sooner you get coverage, the cheaper your rates. Discuss your options with an agent, and sleep soundly knowing that your family is protected.

Sandy Smith
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Sandy Smith

Chief Troublemaker at Yes, I Am Cheap
Sandy Smith is the founder of the peer acclaimed personal finance blog, Yes, I Am Cheap where she shares winning strategies for reducing debt. You can find Sandy all around the internet taking about getting you out of debt. She is also the founder of Colorful Money!
Sandy Smith
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About the Author

- Sandy Smith is the founder of the peer acclaimed personal finance blog, Yes, I Am Cheap where she shares winning strategies for reducing debt. You can find Sandy all around the internet taking about getting you out of debt. She is also the founder of Colorful Money!

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Did you know?

African Americans are significantly more likely to have some type of debt (94%) compared with the general population (82%). Credit card debt, student loan debt, and personal loans are all significantly higher in the African American community.

Source: Prudential’s 2013 "African American Financial Experience" study