For many people, the first introduction to life insurance is when a friend or a “friend of a friend” gets an insurance license. For others, a close friend or relative died without having adequate coverage or any life insurance. For me, I was introduced to a life insurance company where I had to set appointments with friends and family as I learned the ends and outs of the industry and hopefully, make some sales.
Unfortunately, however, this is how most people acquire life insurance – they don’t buy it, it is sold to them. But is life insurance something that you truly need, or is it merely an inconvenience shoved under your nose by a salesperson? While it may seem like the latter is true, there are actually many reasons why you should purchase life insurance.
As we grow older, get married, start a family, or begin a business, we need to understand that life insurance is absolutely necessary. For example, picture a safety net. You may be the greatest tightrope walker in the world, without a doubt. You could perform without a net, but, “Why?” You cherish your life and the life of those close to you and you wouldn’t do anything that showed that you felt differently. Let’s face it, we have no control over the unpredictability of life or of unforeseen occurrences. With that in mind, just as a safety net protects the uncertainty life, so does life insurance. It is an indispensable and fundamental foundation to a sound financial plan. Over the years, life insurance has given many caring and responsible people the peace of mind knowing that money would be available to protect the ones most important in their life, family and estate in a number of ways, including:
1-To Pay Final Expenses
The cost of a funeral and burial can easily run into the tens of thousands of dollars, and I don’t want my wife, parents, or children to suffer financially in addition to emotionally at my death.
2-To Cover Children’s Expenses
Like most caring and responsible parents, it is necessary to be sure that our children are well taken care of and can afford a quality college education. For this reason, additional coverage is absolutely essential while children are still at home.
3-To Replace the Spouse’s Income
If one parent passes away while the children are young, the surviving caring parent would need to replace that income, which is essential to their lifestyle. The responsible surviving parent would need to hire help for domestic tasks like cleaning the house, laundry, and cooking. Add to that equation if it is a single parent, helping with schoolwork, and taking your children to doctor’s visits.
4-To Pay Off Debts
In addition to providing income to cover everyday living expenses, a family would need insurance to cover debts like the mortgage, so they wouldn’t have to sell the house to stay afloat.
For many people, the first contact with life insurance is when the other person or “the other side” gets their insurance license. For others, the death of a close friend or relative without adequate coverage or life insurance. I was introduced to a life insurance company and made an appointment with a friend or relative because I understood the purpose and other aspects of the industry and wanted to do some sales there.
Unfortunately, that’s how most people buy life insurance – they don’t buy it, they sell it. But is life insurance really what you need, or is it just an inconvenience when the salesperson is trying to sell it to you? This may sound true, but there are many reasons why you should purchase life insurance.
As we get older, get married, and start a family, we need to understand that life insurance is absolutely necessary. For example, imagine life insurance. You could probably be the world’s greatest tightrope walker. You can perform without the internet, but “why? You value your own life and the lives of your loved ones, and you wouldn’t do anything to show that you feel differently. Let’s face it, we can’t control the unpredictable and contingent nature of life. With that in mind, just as a safety net protects life from the unexpected, so does life insurance. It is an indispensable foundation for a sound financial plan. Over the years, life insurance has given many caring, responsible people peace of mind knowing that money can be used to protect the most important people in their lives, their families, and their assets, including in a variety of ways.
5-Order the defendant to pay the final expenses.
Funeral expenses can easily run into the tens of thousands of dollars, and I don’t want my wife, parents, or children to be hurt not only emotionally, but in their lives as well.
6-pay the children’s expenses
Like most caring and responsible parents, we need to make sure that our children are well taken care of and have access to quality higher education. That’s why extra security is absolutely necessary when children are at home.
7-Replacement of spousal income.
If one parent dies when the children are young, the surviving parent will need to replace that income, which is critical to their lifestyle. The responsible surviving parent will need to hire help with household chores, such as cleaning, laundry, and cooking. If the parent is single, help with homework and taking the child to the doctor is added.
to pay off debts.
In addition to providing income for daily expenses, families need insurance to cover debts such as mortgages so they do not have to sell their home to make ends meet.
purchase of shares from trading partners
In a business partnership, the partners must insure each other. This is because if one of them dies, the others will have enough money to buy his interest from his heirs and pay their share of the company’s liabilities without having to sell the company itself. They have the same need (because of the risk of death of one of them), and they have also purchased life insurance for the other.
Paying Property Taxes
Property taxes can be high, so get insurance to pay for it so as not to jeopardize your assets or fund your retirement. Using insurance for this purpose is most common in large properties and using permanent (rather than emergency) insurance protects you for the rest of your life.
With advances in medicine and rising health care costs, people are living longer without being able to afford it. Life insurance benefits are funds that can be used after the death of an insured person to help them meet their obligations or purchase basic necessities to ease the stress on themselves and others.
How much insurance benefit do I need to carry?
The individual amount of the policy, or “death benefit” (i.e., the amount paid to the beneficiary), must be large enough to replace the after-tax income you would have earned if you had lived your entire life, assuming you could pay that amount in annual premiums. In other words, the insurance replaces the income you would not have received if you had lived and worked through a premature death prior to retirement.
With the right amount of insurance, your family can continue to live even if your income is no longer available to you. The actual amount you need to purchase depends on your current and likely future income, any special circumstances that affect you or your family, and your current contribution budget.
How long or how long will it last?
Some people like to drive Cadillacs, Lincolns, or Rolls-Royces that are equipped with all the electronic gadgets that make driving as safe and easy as possible. Others prefer less individualistic brands that are just as reliable as their more expensive cousins, but require more attention.
Life is “Cadillac” insurance, and these companies will try to do everything for you, including investing a portion of your premium so that the annual cost doesn’t increase as you age. The investment function of insurance means that premiums are generally higher than similar insurance policies of the same face value. After all, life insurance is designed to protect you for the rest of your life.
Term insurance, on the other hand, is term life insurance. At the end of the term, it can be from 1 year to 30 years, with no unnecessary investment premiums and no 1 to 30 year promises or guarantees. The annual premium for term insurance is always lower than your whole life premium, with no investment component, but at the end of the term, your premiums increase (often dramatically).
Both types of insurance, term or life (or one of its derivatives), have their advantages and disadvantages; both have their place, depending on the buyer’s needs, desires and financial goals. A knowledgeable, professional insurance agent can help you choose the type of insurance that’s best for you. But regardless of your choice, rest assured that you have adequate insurance coverage to meet your short- and long-term goals.
Some people mistakenly believe that life insurance is a scam. This is because if there is no death during the policy period (if it is a term policy), the premium money will be lost or many people will live to a ripe old age and continue to pay permanent premiums. These skeptics compare life insurance protection to gambling protection, abandoning it altogether.
Others argue that life insurance won’t help them. To these people, the answer is: you are absolutely right! In fact, life insurance is a way for a caring and responsible person to help ensure that their family can move forward in the event of a premature death, which is a truly painful period of loss. Of course, there’s no such thing as a gamble.