Think about all the major financial milestones in your life: going to college, buying a house, having kids, sending your kids to college, and retirement. Now think about everything that can go wrong between where you are now and where you hope to be.
To borrow from the old proverb about best-laid plans, life often takes you the scenic route. Unfortunately, the scenic route can be expensive. This is where the importance of life insurance becomes tantamount–because when life goes astray, it’s nice to have a safety net. And while 54% of Americans had life insurance in 2020, an additional 41 million consumers say they need life insurance but don’t have it.
If you’re contemplating life insurance importance and you’re not sure if life insurance benefits are the right fit, here’s why getting life insurance is critical to ensuring the future you want.
The Real Importance of Life Insurance Benefits
In the world of insurance, life insurance is a bit quirky. It’s not like health or dental insurance in that you’re not going to use the policy in your lifetime. The policy pays out after your death. This is also what makes life insurance so important to protect your family.
One of the major benefits of life insurance is paying off debts. When you die owing a debt, the debt doesn’t go away–generally speaking, your estate is responsible for paying off your unpaid debts. Generally, no one else is obligated to pay your debts after your death, but there’s a laundry list of exceptions to that generality.
More to the point, if your spouse and family are already trying to figure out finances after your death, you don’t want them to have to worry about your debts. A life insurance policy can offer critical peace of mind.
Of course, it’s more than just a safety net. Life insurance benefits can also guarantee your spouse and family a financial future, especially if you’re the primary breadwinner of the household.
How to Choose the Best Life Insurance Policy
If life insurance sounds like the peace of mind you’ve been looking for, it’s time to shop around. There are four types of life insurance:
- Whole life
- Term life
- Variable universal
- Small group
Whole life insurance allows you to hold the policy for as long as you like. That way, you don’t have to worry about the policy running out before your death, though that does make it more expensive. Term life insurance comes with pre-determined lengths ranging from one year to 30.
Variable universal policies work a bit differently, in that you get to decide how you invest the money. This allows you to make withdrawals and take risks as you see fit, but it’s not the right choice unless you know your way around investing.
Finally, small group policies are designed for small businesses, where an employer buys the policy and splits the premium cost among their workers.
Not sure when to get life insurance? That depends on you. On one hand, you need life insurance if other depend on your income or if you have debt, which usually means older buyers. On the other hand, younger buyers qualify for lower premiums–and life insurance only gets more expensive with each year. As a rule, it’s better to buy a policy while you’re young.
Thinking of Getting Life Insurance?
If you need to protect your loved ones, the importance of life insurance cannot be overstated. Our job is to help you find great life insurance policies that fit your budget and your life, and if you don’t know what you need, our expert team can help.
Ready to protect what matters most? Get your free quote to get started.