Given the prevalence of online advertising, you’ve probably come across ads and social media posts highlighting the importance of life insurance policies. And even though you make an effort to ignore most of them, there may be a little voice asking, “Could those ads be right?” or “Do I really need life insurance?” Well, the correct answer depends on your situation, financial responsibilities, and a host of other factors.
Here’s an important point to keep in mind, though: if you’re approaching your 50s and you don’t have one, there’s a good chance that you need a life policy. Alternatively, if you’re in your 30s, this is probably the smartest time, financially speaking, to get coverage. No, really, if you’re a nonsmoker, you could get one for less than the cost of your monthly gym subscription.
So, should 2022 be the year you finally decide to get life insurance? Well, that may hinge on your answer to the following:
Do you have kids or dependents?
If you’re the primary source of financial income in your family, you definitely need a life insurance policy. Your partner, kids, siblings, and maybe even parents depend on you for their upkeep. So, in the event that something impacts your health, you need to put plans in place to guarantee their needs are met. At the minimum, your insurance should cover living costs, mortgage payments, and tuition fees. This ensures your dependents have enough money coming in to protect them from destitution.
Do you have outstanding loans?
While federal loans are typically discharged upon the death of the borrower, the same is not true for private loans. Student loans, credit cards, and car loans, among others, may transfer to your estate in the event of your passing. So, if you’re married or you got a family member to cosign your loan, they may be stuck with paying it off. A life insurance policy defrays these costs and prevents your loved ones from being saddled with your debt. By making monthly premium payments now, you protect your family from the responsibility of paying off loans for years.
Do you own a business?
If you own a business and are vital to its day-to-day operation, you need an insurance policy to keep things running in your absence. Say, for example, that your passing may affect revenue in the short term. You could use payments from your insurance to bridge the income gap and ensure the business’s survival, pending a more permanent solution.
Here’s something to keep in mind as well: if you’re applying for a business loan, creditors will probably require insurance, perhaps a decreasing term policy, to protect their loan. That way, if something happens to you, the insurance pays off the rest of your debt.
Do you have a high-risk job?
Jobs have varying levels of risk, and if you work on an oil rig or at construction sites, you’re at a higher risk than someone who has a desk job in the middle of the business district. Now, your employer probably has you enrolled in a group life insurance, but it doesn’t hurt to get one for yourself. Because if you lose your job, you may lose coverage, and even if you don’t, a separate and individual policy means more money to your partner and dependents.
Also, if you have a penchant for high-risk activities like rock climbing, scuba diving, or skydiving, you should belong in this category. Yes, you’re a thrillseeker and the chances of a fatal injury are very slim. But it’s better to have a life insurance policy and not need it than to need it and not have it.
Conclusion
A life insurance policy is hardly ever for you; the most you can get out of it is peace of mind and the knowledge that your family will be cared for if you pass. But if you can afford one, then you should definitely look into it. Life insurance offers way too many benefits to your loved ones, and the flipside is quite harrowing.
If you’re thinking of getting a life insurance policy but there are some questions you need answered, or some fears you need allayed, that’s okay. Just click this link to book a FREE consultation with a life insurance specialist.