Life insurance is one of those things just about everyone needs but far too few people actually have. It’s easy to put off purchasing a policy when you’re young and relatively healthy but the longer you wait, the greater the chances of something happening before you’re able to get covered. If buying life insurance has been on your to-do list for a while but you haven’t quite gotten around to it yet, here are 10 reasons why you can’t afford to wait any longer.
1. Replace Lost Income
Life insurance is designed to provide financial security to your loved ones after you’re gone. When your spouse and children rely solely on your income, you have to consider what would happen if you were to die suddenly. If you have adequate coverage they won’t be left in the lurch when the monthly bills are due.
2. Cover Burial Expenses
Even a basic funeral service can still run several thousand dollars and while it’s possible to pay the cost in advance, most people normally don’t think that far ahead. If you don’t want the expense to be a burden for your beneficiaries, life insurance gives them the funds they need to cover it.
3. Pay Off Debt
Just because you die doesn’t necessarily mean your debts suddenly disappear; if you’re married and you have co-signed for mortgages or other loans, they may become solely your spouse’s responsibility. If not, your creditors may try to collect what’s owed from your estate, effectively shrinking the amount that will be passed on to your heirs. Life insurance allows those you leave behind to take care of any lingering financial responsibilities.
4. College Planning
There are lots of ways to save money for your child’s education but a life insurance policy can be a good way to supplement your efforts. If your child ends up borrowing money to get through school, the insurance proceeds could also be used to wipe out those pesky student loans.
5. Build Cash Value
Term life insurance stays in place for a set period of time but whole life insurance is permanent coverage that only ends if you cancel the policy. One of the things that makes whole life attractive for some people is the fact that it allows you to build up cash value over time. Having that extra cushion you can tap at any time may come in handy if you have a financial emergency down the road.
6. Diversify Investments
Some people also use life insurance as an investment tool. Universal life policies are tied to a specific investment product and policyholders receive dividend payments based on its performance. If you’re considering this type of insurance, just be sure to read the fine print so you’ll know what the potential risk and returns are going in.
7. Business Planning
If you own a business, it’s vital that you have life insurance to cover your obligations so your hard work doesn’t go to waste. When you’re involved in a partnership with someone else, you should both be covered so that if one of you dies, the other isn’t left holding the bag financially.
8. Estate Taxes
When someone passes on, their heirs are typically faced with paying estate and inheritance taxes on any assets they receive. If you’re worried about your loved ones getting hit with a big tax bill, buying a life insurance policy to cover these added costs may make sense.
9. Coverage is Affordable
One of the excuses people tend to make for not buying life insurance is the cost but the truth is, coverage is usually pretty affordable. Term life tends to be less expensive than whole or universal life and the younger and healthier you are, the lower your premiums will be. Unless you’re a smoker or you have a preexisting health condition, you may be able to get covered for as little as $1 a day. Compare policies now to see how affordable they can be.
10. Peace of Mind
You never know what can happen but having life insurance allows you and your loved ones to prepare for any eventuality. Even if you just get a small policy, you may find you’ll sleep a little easier at night knowing that if something were to happen, there’d be a cushion for your family to fall back on.
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