Is Life Insurance Worth the Cost?

It seems everyone these days is looking to save as much money as possible. Cutting costs can be beneficial, but there are some expenses that are necessary. Going without life insurance is a risk most people should not take. If you are wondering if life insurance is worth it, the simple answer is a big yes. 

Do You Really Need Life Insurance?

Many people mistakenly believe purchasing life insurance is something that can be put off until later in life. If you have a spouse or children that rely on you financially, purchasing life insurance is essential. It is truly worth the cost of purchasing life insurance to ensure the financial needs of your loved ones are met once you pass away. 

To look at things in the right perspective, it helps to think about your family’s financial situation, should your income suddenly be taken out of the picture. Would your family be able to meet their day to day financial needs or would they suffer?

Purchasing term life insurance is an essential component of financial planning. No one wants to leave their spouse or children in financial stress. The grieving process alone is stressful enough without the added complications of financial difficulty. 

What Does Life Insurance Cover?

To fully appreciate the worth of purchasing a life insurance policy, you first need to know what it covers. Your loved ones can use this policy for the following.

  • Replace lost income
  • Pay daily living expenses
  • Cover the burial costs and final expenses
  • Fund your children’s college tuition
  • Pay any unpaid debts
  • Provide an inheritance for your children

Although it is imperative to purchase term life insurance if you have a spouse or children, even those who are single can benefit from this coverage. Not only can it be used to pay your burial expenses, but it can also be used to pay off debts that may have been co-signed by your parents or others. 

Why Is Term Life Insurance So Beneficial?

Although you have plenty of choices when it comes to life insurance coverage, term life insurance is generally the most valuable and cost-effective choice. The following are some of the benefits of choosing a term life insurance policy.

1. Term life insurance allows you to gain the highest death benefit at the lowest price.

2. You only purchase coverage according to the terms you need. Coverage terms range from 10-30 years, depending on the policy.

3. Those who purchase while they are young and healthy can expect to pay extremely affordable premium rates.

4. There are policy riders and conversions that can be offered to customize the coverage needs of the individual.

5. The death benefit of a term life insurance policy can be directly paid to the beneficiary, so they do not have to wait for the probate process to receive their benefits. 

6. When a death benefit is paid out on a term life insurance policy, there is no public record of the amount, so beneficiaries can maintain their privacy.

7. In most cases, the death benefit is not taxable and beneficiaries will not be saddled with a tax bill.

8. Sometimes, term life insurance policies can be used as collateral for certain types of loans.

Is Your Work Term Life Policy Enough?

If you have a term life insurance policy through your work, you may mistakenly believe this is enough, but that is not always the case. While this type of work policy is beneficial, those with children or debts may be underinsured. 

The recommended amount of term life insurance is five to ten times your income. Most work term life insurance policies only offer two to three times the income amount so you could find the coverage severely lacking.

Most people are not aware they can purchase their own term life insurance policy in addition to the one they have through their work. Because a work policy usually ends when you leave that job, it is wise to have a backup policy that is more substantial and reliable. No matter what type of life insurance coverage your employer offers, it is wise to consider purchasing your own policy. 

Conclusion

Is life insurance worth it? The answer to that question is a resounding yes. Providing for your final burial expenses and the financial needs of your family after death is essential. When purchasing term life insurance, carefully consider the amount of coverage and the terms so you can make the best choice. 

With term life insurance, you can rest assured your family will not be burdened with your final burial expenses and debt while they are going through the grieving process. The right policy and coverage level will provide for your family’s financial needs so there is less worry and stress. Check out your options today. 

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