Life insurance is one of those items that often sit on a to-do list for months and months, which is a bad idea for a variety of reasons. Here some of the reasons why you shouldn’t skip on life insurance, or wait too long to get it.
Keep Income Flowing for Dependents
Many people have dependents. From children to the elderly they care for, or those that need assistance with everyday life. Life insurance can replace the income that will be lost if you die. Parents with young children are the most common reason that people get life insurance.
That’s not to say that couples without children shouldn’t consider life insurance. A spouse or partner could become financially stricken by the sudden loss of income and require assistance to maintain stability. If the government or employer-sponsored benefits of a surviving spouse or partner will be reduced after death, life insurance can be a great help with that reduction.
Take Care of Any Standing Debts
It is recommended by financial experts to include your total debt amounts when considering the coverage amount of life insurance policies. You want to ensure that whoever gets the money from the policy in the event of your death will have enough to cover all your outstanding balances and debts in full—along with all the costs that come with a death.
Mortgage is the largest debt for Americans. Student loans, if you have them, should be kept in mind as well. Federal student loans are forgiven upon death, but private loans might not be. If you live in a community property state or have a co-signer on your private student loans, it would be a good idea to consider a life insurance policy.
You Work a High-Risk Job
Your occupation is always taken into consideration when life insurance companies assess your risk level. If you work in a dangerous environment, you have a higher chance of dying than someone who works from a desk, in customer service, retail, and the like.
Jobs in construction, mining, aviation, firefighting, oil and natural gas, and a couple of others will usually result in a greater premium for life insurance policies. The policy is worth having for the high-risk of the job.
It’s the general practice of most life insurance policies do not allow the addition of a disability rider for people who work in high-risk industries. It’s recommended to buy separate short-term disability insurance to give protection against temporary loss of income.
To Feel Secure
No one knows when they will pass away. It could be in a year, 20 years, or tomorrow, we just don’t know. It will happen, that’s a fact of life. Life insurance doesn’t exist to use the money to replace a person’s life, but it can ease added financial stress from a death.
Having life insurance coverage will rest your mind and bring comfort to your family that there is protection in place in case tragedy strikes. Having an active policy removes that worry. Life insurance gives protection to the heirs of the policy from the uncertainties in life and can help through a difficult time.
Some life insurance policies can create a cash value that can be borrowed or withdrawn on the owner’s request—provided it’s not paid out as a death benefit. It can be hard to navigate these different policies when you are shopping for insurance on your own, but tools like The Insurance Hero can help you find this type of policy and compare the price of premiums.
A cash-value policy can create a sort of ‘forced’ savings plan, as many people make paying their life insurance a priority. It can also work as a last-resort rainy day fund for emergencies.