Life insurance is not fun to talk about, and it’s typically not a process everyone enjoys.
However, much like death and taxes, buying life insurance is an essential part of life and a crucial element of sound financial planning. Most everyone is aware that they need life insurance but, from our experience, many people procrastinate until there is an important life event that pushes them to buy it. However, there are some serious benefits to buying insurance early on, especially if you have debt, are married or planning on marriage, have or are planning on starting a family, or you are a business owner.
Here are a few reasons why life insurance is important:
If you were to die tomorrow, who would assume your debt? If you own a home, business, or have personal liabilities, someone else will become responsible for those liabilities (generally your next of kin). Life insurance ensures your spouse, children, parents, or siblings don’t have to assume responsibility of your debt.
Do you have children? Life insurance could be used to ensure your children have a college fund and can continue being cared for, in the event something happens to you.
Do you have life insurance through work? Even if you have a group life insurance policy through your employer, don’t assume that it’s an adequate amount, or would remain active if you’re not longer employed at the company. Insurance becomes progressively more expensive as you age. Try not to wait on buying life insurance, as it may only become more of a financial burden.
Life insurance is not for you, but to protect your family and loved ones. If your loved ones depend on your financial support for their livelihood, then life insurance is a must, because it replaces your income when you die. This is especially important for parents of young children or adults who would find it difficult to sustain their standard of living if they no longer had access to the income provided by their partner.
Life insurance gives you peace of mind.