Sometimes when I sit with families to talk about their life insurance needs I get asked, “Why should I have life insurance?”
Most people know the basic reasons to have insurance are to pay off debt when you die, replace your income, or pay for burial expenses, but there are benefits you can use while you are living too. Let’s talk more about all the reasons why life insurance is important.
Why Life Insurance is Important
1. Settle Debt
Do you have any debt? Think about your mortgage, car loan, credit card balances, or other loans you have. If you were to die today, who would be responsible for settling these debts on your behalf?
When I ask this question, most people know who would bear this burden, and it is usually someone they love very much. Putting a plan in place to cover these debts in the event of your death, will lessen the weight of the burden.
2. Income Replacement
Are you the breadwinner in your family? Or maybe you are the one that keeps the house running smoothly? Either way, without life insurance a financial burden will be left behind if you died today.
For example, I am the primary breadwinner in my family, and my wife has taken on the responsibility of educating and raising our children, making our house a home, and keeping on top of our family schedule. While my death would mean loss of income for her, her death would mean a financial burden on me as well. There would be no way I could do all that she does and provide for us at the same time. I would need to hire help, or work less. Either way, when one of us dies, lack of money would cause a greater burden than grief alone.
Having an income replacement plan, would not only give us options to decide the best way to move forward, but we would have the time we need to make such an important decision as well.
3. Final Expense
Have you ever donated to a Go Fund Me, or collection to cover burial expenses for someone you know? Or maybe you had to take out a loan or credit card to pay for the funeral of someone you love?
Can you imagine the death of someone you love dearly, and having the financial burden of paying for their burial? I remember my mother-in-law talking about her grandmother’s death. Not only did she grieve for her loss, but she had to put all of the final expenses on a credit card to pay for it. Every month, when she would make the payment to the credit card company, she was flooded yet again with all of the emotion she had after the funeral. To this day, the experience has left an impact on her, and it all could have been avoided with a life insurance policy.
How about life insurance you don’t have to die to use?
1. Life Threatening Illness
How would you like to receive a portion of your life insurance check in advance if you were diagnosed with a life threatening illness?
You could:
- Pay for medical costs including necessary daily care
- Experimental treatment that health insurance will not pay for, which could save your life
- Take care of any debts or financial burden ahead of time, so your family doesn’t have to worry about it after you’re gone
- Or even check something off your bucket list
2. Injury
How would you like to receive a check every month to help cover living expenses if you are injured and cannot work?
This type of benefit does just that, plain and simple.
3. Severe Health Diagnosis
How would you like to receive a specified portion of your life insurance ahead of time if you suffer from stroke, cancer, heart attack, major organ failure, or kidney failure?
Though you may not die from these diagnoses, healing and recovery time is necessary, and this benefit will help lessen the financial strain during that time.
4. Cash Back Option
What if your life insurance plan wrote you a check for all the cost you paid for coverage, if you did not use it by a set period of time? I wish my car or homeowners insurance did that.
This option acts like a savings account, and in some cases you can even take money out during the life of the policy to use toward:
- Down payment on a home
- College education
- Wedding
- Or at your discretion.
As you can see, there are many reasons why life insurance is important to have. We are here to answer your questions, and offer a free needs analysis and review of your current plan and policy. Simply reach out via phone or through our contact us page on our website.