Do you really need life insurance? Here are 5 factors to consider
Yes, life insurance can be pretty costly. It may also be one of the most important parts of building a secure foundation for your financial future. At least, these are the things that we are often told. However, how true are these notions? Just how crucial is life insurance and what are the factors that determine whether or not you actually require the safety net that insurance plans can provide?
Here are a few things you might want to consider.
Can you afford it?
Many people might often forego life insurance plans for a variety of reasons, the most common one being costs that add up and can impact a family’s or individual’s expenses. Depending on the country in question and the stability of its economy, a large portion of the population may not be able to afford it.
Most of the time, those who can't afford insurance often include young couples with small children. These are the years when couples may struggle to make ends meet, especially when student loans, house payments and rising costs of living are factored in. The good news, however, is that term insurance is usually very inexpensive.
Are you starting a family?
Those who have just gotten married recently and are starting a family of their own should probably consider purchasing life insurance. For one, rates are cheaper at this point in time compared to when couples grow older and have children that depend on their income. This is why purchasing life insurance very early on is recommended as a crucial preparation step to starting a family.
Are you a young single adult?
Young people are usually independent, in the prime of their lives and too busy to worry about the far future. Still, there are a few scenarios where younger working adults may want to purchase life insurance. They might want to pay for their own funeral costs or help support an elderly loved one who needs financial care.
Additionally, purchasing life insurance at a young age means that by the time it needs to be used, the paying stops past a certain age. The older an individual gets, the more expensive life insurance can become. The life insurance medical exam also gets harder to pass and candidates can risk being un-eligible for the insurance plan.
Do you have life insurance through work?
Employers often give their workers additional benefits as part of an employment package. However, buying your own life insurance policy can still be for the best, even with a pre-existing insurance plan under a company. This is because no job is stable.
You might lose your position at the company or decide to change jobs and once that happens, you lose the company's life insurance policy. It's recommended that you at the very least buy a smaller backup policy to ensure you always have a little protection even without a job.
Do you have kids?
Even those that aren't keen on getting life insurance might eventually change their minds once children come into the picture. Kids are fragile and parents worry about them getting injured or suddenly falling sick. Some families even have extra concerns about their children's long-term health due to hereditary risks.
This is why some people purchase life insurance as early as possible for their kids so that they won't have to worry about failing medical exams later in life when they need life insurance for their own families.
There are other factors to consider before deciding on whether life insurance is for you. People are different and their circumstances often determine if they can (or even should) purchase an insurance plan. However, insurance can be a great help for those who find themselves in difficult situations. Think about the decision to purchase a life insurance plan carefully. Seek help or reach out to an advisor and get an expert’s opinion on your case. I’m available if you would like to reach out. Contact me today.