This is an age old question and quite frankly, one that causes so many of us considerable stress. To begin with, everyone’s situation is different and our needs can vary wildly depending on whether or not we have dependents, our job situation, how old we are… and a host of other factors. To make matters worse, life insurance can and often is oversold (its one of the most common complaints about life insurance) and so it’s no surprise that this fairly simple question is not all that easy to answer. But there are good reasons to buy life insurance, and by a fairly broad consensus, here are some of the most common reasons:
The Big “What if?”
None of us know what is going to happen to us at any given moment, so we’re all faced with the essential need to plan for “What if XYX happened to me?”. If you’re married, have children or have others depending on you, being able to take care of them financially is perhaps the single easiest justification for life insurance.
Six feet Under
As simple as this sounds, we all are going to have to be buried (or cremated) and that costs money. Big money…potentially with the average burial costing as high as $7,000.00 in certain parts of the country. Saddling your loved ones with this expense would not be a very positive lasting memory.
Till Debt do us Part
Replacing your income for your loved ones is part of the financial picture, but do you have any form of debt that someone you love will be obligated to pay? If so, then providing insurance that pays off your debts (including a mortgage, car loans, education loans, credit card debt, etc.) is yet another completely valid reason to buy life insurance.
You have your pension and your 401k accounts all in place right? You’ve saved a good batch of money for your golden years? Well, some of us may not have been that diligent in our financial planning unfortunately. Life insurance (and annuities specifically) can provide a supplemental income that pads your other retirement income streams quite nicely.
Most Valuable Players
Each business has at least one or more “Most Valuable Player” and if he or she was hit by a bus, what would that do to your business? That’s right, insuring your business against the awful prospect of losing key members of your staff is a very common and valuable use of life insurance. So, protect your MVPs so that you can stay in the game.
The Gift that keeps on Giving
Believe it or not, giving to charity is a quite popular reason for purchasing life insurance. One of the reasons why is that you can give a proportionally larger amount to a charity than you actually pay into a policy and so many fine people do this with a specific charity or cause in mind. If for nothing else, it has to look good on your resume in the afterlife right?
There are, perhaps, many other good reasons for buying life insurance, so keep doing your homework. One thing to add is that life insurance typically becomes more expensive as you get older. Locking in a rate when you’re younger and healthier is generally considered a wise move, and with your particular needs not withstanding, will help keep your life insurance more affordable in the future. With CoverYoo’s calculator page we attempt to help you answer basic pricing questions quickly and without having to provide us personally identifiable information (again, we’re all about hassle-free life insurance here). The cool thing is that as you adjust your answers, CoverYoo will automatically refresh the insurance quotes you see on the page. Go ahead and play with it…you won’t break anything.
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