Many people know that life insurance is important to have, and yet not enough actually get it. Some decide they’ll get it later in life while others feel it’s a waste of money because they don’t have any health issues. However, it’s essential to realize that even if you think you’re too young, too healthy, or too broke, life insurance is still a valuable policy that can provide financial security and peace of mind.
Types of life insurance
There are two main options for life insurance: term and permanent. Term life is arguably the most popular since it’s typically the cheapest. It covers you for only a set period of time, such as five, ten, or twenty years. People generally pick a term that lasts for their career so it can help to replace their income should they pass away before retiring On the other hand, permanent life insurance, which includes whole life and universal life, lasts for your entire life after you purchase it; for this reason, it tends to have higher premiums. There are also a few other options, including variable and burial life insurance, so it’s worth weighing your options before you pick a policy.
Most policies have a death benefit, which is one of the main reasons to have life insurance. This is the amount of money that insurers will pay out to your beneficiaries if you should pass away during your policy’s term. Your beneficiaries can be a life partner, child, or other loved one who can then use the payout to pay off your debts or expenses or supplement their own finances.
Even after understanding the value of life insurance, you may still be left wondering how or why you can benefit from taking out a policy. Let’s take a look at three common misconceptions that may be keeping you from buying life insurance.
I’m too young
While it’s true that, in general, younger people have fewer health issues that would make life insurance feel unnecessary, the fact is that the younger you get life insurance, the less you’ll have to pay for it. That’s because your health makes you a low risk, meaning you’re cheaper to insure. The average yearly premium for a twenty-year-old purchasing a $500,000 term life policy is $250, but that rises to $400 for a thirty-year-old and $950 for a fifty-five-year-old. And, for many policies, that amount will stay the same throughout the policy term—including for whole life. So even if you think you’re too young, it’s still a great safety net to have and will ultimately cost you less than if you waited another ten to twenty years.
It’s too expensive
Despite the above, you may still think that all life insurance policies cost too much. However, the reality is that the average cost is just $26 a month (based on the most common situation, a forty-year-old buying a twenty-year, $500,000 term life policy). Obviously, your cost will differ based on your age, term length, amount sold, and insurance provider, but it will still likely be more affordable than you may have previously thought. Adjusting your budget to better fit in life insurance is worth it for the peace of mind and security it will provide.
I don’t have any dependents
Even if you don’t have a life partner or children, and maybe aren’t ever planning to, if you own a house or have significant debt, these expenses will fall to your loved ones after you pass away. Your policy’s death benefit can go a long way toward helping them pay off those debts and expenses, leaving them in a better financial state as a result.
Regardless of your specific situation, it’s imperative to have insurance if you do have a partner, children, or other dependents that rely upon you financially. These policies are in place for not just your benefit but also for those who will have to carry on once you’re gone. It’s a simple step you can take now to provide protection during a time of uncertainty. To help you determine which policy is best for you, reach out to an insurance professional who can guide you in the right direction.
This material contains only general descriptions and is not a solicitation to sell any insurance product, nor is it intended as any financial advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
This article was prepared by ReminderMedia.
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