The Importance of Life Insurance
It is easy to understand why life insurance is important and yet, there are millions of Americans who do not have a coverage. The main reason why life insurance is viewed as an expense instead of an urgent necessity is because people don't consider the consequences of death to be a present matter, even when death can happen at any time to anyone. Consider the important people in your life and how would they be financially impacted if you were gone. Who will be able to cover the mortgage, monthly bills, your children's college education, any outstanding debts, or let's not forget funeral expenses (which can cost up to $10,000)?
At Insure Me Better, we believe that when it comes to life insurance, it is not a matter of "if you need it", but a matter of "how much you need". The sooner you look into getting a life insurance policy, the better because as you age, policy rates go up exponentially.
Common Mistakes When Considering Life Insurance
"I’m covered by my policy though work"
Employers sponsored life insurance typically aren’t very large and don’t follow you to your new job. If you only count on this policy, you may not be adequately protected or might lose the ability to get life insurance if you lose your job.
"I can’t afford to get life insurance right now"
There are different types of life insurance policies available that make it possible to find something to fit any budget. Term life insurance, which is life insurance purchased for a period of time, can cost as little as two premium coffees.
"Life insurance is only for people with kids"
Not necessarily. If you pass away, you could burden your family with your unpaid debt or funeral expenses. Buying a life insurance policy even if you are single might ensure your insurability in the future. In addition, consider some of the benefits of life insurance listed in this page.
"I have better chances investing the money elsewhere"
Life insurance should not be considered a financial investment. An investment involves risk while insurance protects against exposure. Its main purpose is to provide to those who depend on you the most during a financial hardship in the event that you should you die unexpectedly.
Unknown Benefits of a Life Insurance Policy
Receive benefits if terminally (or seriously) ill
These are known as "living benefits" and are standard in term and whole policies. Living benefit provisions generally allow those with a life expectancy of 12 months or less to receive a portion of their death benefit in advance.
Have a source of cash if you are disabled
Many plans offer chronic illness or critical illness riders that pay out funds if policyholder becomes disabled or experiences a stroke, heart attack, invasive cancer, etc. Think of it as a vitality safety net if you are not able to work.
You can be able to ride out the bear market
Although this strategy works only with insurance policies that have cash value, this novel approach can help policyholders take a tax-free loan from their policy rather than withdrawing from a retirement fund when the stock market is sagging.
Give one last gift to a charitable organization
Depending on the policy, your age, and health, you can leverage your money for a gift for a charitable organization of your choice by turning small monthly premiums into a large contribution.
You can be able to secure the future of your business
A "key employee" life insurance policy can be put in place to protect a business from losses in an invaluable employee or founder dies. This can help to keep the business afloat until new arrangements are made.
Get your money back if you do not die
Most policies can charge you extra for a return of premium rider which will allow you to get all of your money back if you end up outliving your insurance policy.