Reasons to Buy Life Insurance – Yes

Life insurance is a way to protect the ones you love after you are gone. People who are independently wealthy may not need to have life insurance but for those who resources are limited, life insurance is a must.

What life insurance can do is guarantee that your funeral and burial expenses will be paid. Nobody likes to think about dying but it is the only certainty in life. One of the best things that you can do for those you leave behind is to make sure that they are not forced to deal  with your final expenses in addition to their grief.

Some employers offer life insurance as part of their benefit package. By all means,  if they offer it , you should take it. It will most likely be term life and if you have to pay for it,  the group rate is most likely cheaper then anything you could get on your own. Keep in mind though, that you’re not always able to continue paying for the insurance if you terminate your employment.

The best time to get a life insurance policy is when you are young and healthy. The rates will be lower. When you get older or have any kind of a health issue,  it can be expensive or impossible to purchase life insurance.

Okay,  you are paying attention and you want to buy life insurance,  where do you begin? There was a time when almost everyone  knew an insurance salesman, but times have changed and often these days you may purchase your car insurance online and not know an agent at all. Talking to family members can help, who are they using? There are many solid insurance companies.  Do your research , this is an important investment in your future.

When you find an agent,  how do you know what type of life insurance to buy? Smart Money has an excellent article explaining the options in detail. There are two main kinds, term and whole life. With whole life you will pay more and longer and at the end you will have cash value. What that means is that after a certain number of years you can borrow against the value of your policy.

Term life insurance, is just that, insurance that has an ending. It may be a twenty year term.  You will pay for twenty years at which time you will have no policy and no cash value. It is the insurance company gambling that that you are not going to die. How they figure the odds is how high your premium will be. This is the better choice when you have a young family. You can take out a half million dollar, twenty year term life insurance for a price that you can afford; whole life would be prohibitively high.

How much insurance do you need? If you have a family,  you want them to be supported while the children are young. That may mean up to 20 years of your annual salary. Even if you don’t have a family, just a funeral and burial will cost $10,000 and if you have any outstanding debts,  you don’t want your family to be struggling to pay them.

Do you need life insurance? Take a good look at your financial situation and then decide. If you want to provide for those you leave behind, then yes, you need life insurance.