“Why should I buy life insurance? I know a bunch of people who live fine without it. I could use that extra cash to pay bills or take my family on vacation.”
In our twenties, death seems so far away. In our thirties and forties, we start to come to grips with our mortality and prepare for the future. After we pass sixty, we want to make sure our finances are in order… just in case. At every stage of life, however, a common question is, “Why buy insurance?”
Top Benefits of Life Insurance
The two major types of life insurance are term life insurance and permanent life insurance, also known as whole life. The contract language differs, but both life insurance policies offer a number of benefits:
- Pay for funeral arrangements, flowers, musicians, casket, vault, urn, facility rental, cremation, and/or burial
- Pay for residual medical bills and nursing home costs after the insured’s death
- Pay off the home mortgage so your loved ones can continue to live comfortably
- Pay off credit card bills, auto loans, and personal debts so your spouse or partner does not become responsible for them
- Reserve money to pay for the college education of any children
- Provide charitable donations to the foundations and causes that have meant the most to you and your family
- Provide your family and close friends with an inheritance that reminds people of their dear place in your heart
- Leave a legacy that celebrates the highlights of your life
Everyone dies. The choice is whether you want to save thousands of dollars over a lifetime to pay for final expenses or whether you want the life insurance company to take care of everything for as little as $19 per month.
Alternatives to Life Insurance
Who needs insurance? If you do not want to spend 63 cents per day for term life insurance coverage, you do have alternatives. For example,
- You can pre-plan your funeral arrangement needs. You will spend approximately $700 per year for 10 years, depending on the types of services you request.
- You can take out several health insurance policies to cover the complete cost of medical bills in your last days. Keep in mind, however, that Medicare limits certain support programs.
- You can rent an apartment for your entire life, or you can prepay your mortgage.
- You can stay debt-free, sticking to a budget and only spending money that you have.
- You can start a 529 college savings account and set aside $400 to $500 per month to account for rising tuition costs and inflation. That’s per child.
- You can make all donations during your lifetime or strike charities from your estate planning.
- You can save money every month to provide an inheritance. Save $500 per year for 40 years, per person.
Paying for a qualified financial advisor can help you keep track of everything you need to do. You may never get your costs down to 63 cents per day, but you’ll certain stay business even after retirement!
Why Should I Buy Life Insurance?
Buying a term life insurance policy or a whole life insurance policy is an affordable, easy, and quick way to plan for your family’s financial needs after you pass away. If you are still asking, “why have life insurance?” here are the top reasons why a policy is worth your investment.
Top 10 Reasons to Buy Life Insurance
- You have kids. Life insurance guarantees a fixed income so a surviving parent can take care of the children without working two jobs. The death benefit can also provide assistance to disabled or disadvantaged children.
- Your kids are under age 24. Insurance benefits can pay for education at a university, community college, or vocational school.
- You have a surviving spouse or partner. The right life insurance policy can pay off any remaining debts and ensure that your house remains in the family.
- You want to be able to help your family even after you are gone. Life insurance lets you leave money for your daughter’s wedding, your son’s business ideas, or your husband’s retirement.
- You own a business, especially a sole proprietorship, that may need help filling your position and transferring your responsibilities.
- You work best when you have a definite plan that does not rely on saving hundreds of dollars each month for years and years.
- You want to be able to take a cash loan from the accumulated value of a permanent life insurance policy.
- You need tax protection and estate-planning help.
- You want to lock in low premiums for young children.
- You are healthy and can qualify for preferred rates without a medical exam.
Life insurance is ideal for children, young adults, newlyweds, middle-aged adults, and retirees. Why buy insurance? To give the gift of financial freedom to your family even during their time of greatest sorrow.