To many people, buying life insurance is something you do when you are older. But that is a myth and could not be farther from the truth! Regardless of your position in life, nobody knows what the future holds. Everyday, people pass away and the devastating consequences which this leaves on the family is enough strain to add the worry of the survival of those left behind.
The case is made truer if the person who dies is the breadwinner, and has dependents in the form of children, spouse or siblings. Here are reasons why you need a life insurance policy.
- Look after those left behind
A life insurance policy helps you to secure the future of those who would be left behind after your demise. Nobody prays to die, but with that occurrence, you do not want to let them down totally. From replacing lost income to payment of the children’s education, taking out a life insurance ensures that everyone gets the much-needed security to pull through the loss.
You do not want your children having to get student loans or dropping out of school entirely because you did not factor in the eventuality of death.
- Handling debt left by you
Nobody should have to deal with debt left behind by a family member because of their death. Many times, they are not even prepared to handle such financial burdens. This debt can range from personal loans to credit card loans. A life insurance policy helps them to take care of such debts after you are gone.
- Achievement of long term goals achievement
A life insurance policy can help you achieve long term goals in the event of a cash-in. Also, due to the fact that the life insurance can come with multiple investment options, it helps you grow your cash without paying any mind to it. However before engaging in life insurance policies that involve investments, be sure to read through the terms and conditions in order to have a full grasp of the risks and rewards. You do not want to be caught unawares by policy changes. A life insurance also supplements your retirement goals. A life insurance can serve as some sort of pension plan, whereby you enjoy a steady flow of income even after retirement.
- Life insurance is cheaper to buy when you are younger
Now, we are not saying that every millennial should get a life insurance. You do not need it if you are still living off your parents. However, if you are a working millennial and you have dependents, you need to buy a life insurance policy. Coverage costs are much lower when you are younger. However, beware because insurance agents may want to cash in on your youth and naiveté to sell you an insurance policy which you do not exactly need.
Due diligence needs to be done, before you accept an insurance plan.
- You may not qualify for insurance when you are older:
A person’s “insurability” is important in determining whether or not they qualify for a life insurance package. To determine the premium to be paid on a life insurance, the insurance company conducts a series of health checks on your personal health and your family’s health. At a young age, your “insurability” is at its highest because you are most likely do not have any health challenges. However, as your grow older, the chances that you will qualify for a life insurance reduces because health problems may set in. When you are in good form, you get to pay very little as premium, compared to someone who has risky health behaviours or health challenges.
Life insurance as all insurances are based on uncertainties. You may be well now and feel that taking a life insurance is not necessary. But do you know that once you fall ill, you may not be allowed to take an insurance policy? It is like buying a car insurance, the insurance company would only hand out insurance policies on new cars and not worn out rickety cars!
- Business needs:
Though this is not common, many people take life insurance because of their businesses. This also helps if you are the provide most of the funds in the business. For the period after your demise, the business would be able to make use of the proceeds received from your insurance policy to keep running while looking for alternative sources of income
It is also very important that when taking life insurance in business, both partners do so to avoid trust issues which may arise.
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