Nobody likes thinking about when they’re going to kick the bucket. Until cryopreservation becomes a reality, however, death is an inevitable fact of life. Perhaps it is this reluctance to think about dying that prevents many people from buying life insurance. In fact, a study conducted by LIMRA shows that only 60% of Americans have life insurance, leaving 40% of the country’s population unsure about life insurance and why it’s needed. This begs the question, who needs life insurance?
1. It’s Not About You
Most insurance is geared towards protecting the policy-holder. Car insurance protects you when you have a car accident. Health insurance saves you from huge medical bills. There’s even insurance for electronics and cell phones, in the event you drop your phone and shatter the screen. Life insurance is different–for the most part, you do not benefit from having life insurance. Instead, it’s the loved ones you leave behind that need financial protection, and they are the true beneficiaries. Here are 4 benefits of having life insurance.
2. Covering Funeral and Burial Expenses
It makes sense to have life insurance to benefit your dependants, but what if you’re single? While you may not have mouths to feed beside your own, you’ll still leave behind parents, loved ones, and friends when you die. Chances are good you’ll have funeral and burial costs, and rather than leaving this behind as a burden, life insurance can cover the necessary expenses.
3. Paying Off Debt
It’s likely that you’ve incurred some debt during your lifetime. In fact, the total average debt for Americans age 35 and under is a whopping $67,400! And while it would be nice for that debt to disappear when you pass away, it doesn’t. One benefit of life insurance is shielding loved ones from unpaid debt.
4. Caring for Spouses
There are over 60 million married couples in the US, which means a fair number of adults who pass away are survived by a spouse who suddenly becomes solely responsible for the financial situation of the household. The standard suggestion is to buy a life insurance policy that amounts to 7 to 10 times your current income. This number applies to both spouses, even if one does not work. In the event that the stay-at-home mother or father passes away, the value of the childcare and other tasks they completed will still need to be covered. On the other hand, if it is the non-working spouse who is living, having the benefit of the life insurance policy allows them time to grieve, stay home with young children, or buy some time for them to locate employment.
5. Providing for Children
It may seem obvious that children are one of the main reasons for obtaining life insurance, as they are dependant on their parents. Some financial gurus have suggested adding an additional $100,000 per child to the standard 10 times the income amount. Looking forward to the future, this provides children with a secure amount of savings for college.
6. It’s About Them
Life insurance is really a misnomer–it really could be called death insurance. It doesn’t ensure that you continue living. Rather, in the inevitable event of your passing, it ensures that your loved ones are cared for and that an already difficult time is eased as much as possible. Whether you’re looking out for parents, spouses, or children, nearly everyone can benefit from having life insurance.