8 Important Reasons Why You Should Buy Life Insurance
What would happen if you were no longer there to provide for your family? Are you certain your loved ones would have enough money to live comfortably in your current home and remain financially stable? Most Americans agree that these are important questions to ask. In fact, 84% of people say having an adequate amount of life insurance is important to their financial peace of mind. Here are eight important reasons why you should buy life insurance and what it can help cover.
1. Helps provide for your children.
It’s important to have life insurance when you’re a parent, whether it’s the birth of a child or through a new marriage. If you or your partner were to pass away, life insurance can help pay for child care, daily living expenses and higher education.
Life insurance makes it possible for your children and loved ones to continue living life as normally as possible, after your passing, without a huge financial burden. Without life insurance coverage in the event of your passing, they won’t just lose you but also the financial support you provide.
Life insurance can be especially important for stay-at-home parents. That’s because the work stay-at-home parents do on a day-to-day basis carries monetary value. For example, if you were to pass away, your surviving spouse or partner may need to pay for child care, food preparation, yardwork, tutoring, cleaning and much more.
2. Covers end-of-life expenses.
The average cost of a funeral and burial is $7,848, not including the cost of a cemetery monument, marker, flowers or obituary. These can be difficult expenses to afford, especially if the death was sudden or unexpected. Fortunately, if you have a life insurance policy, it can help pay for:
- A memorial service
- Burial
- Flowers
- Obituary
- Family members’ travel needs
- Estate taxes
- Legal support
When you purchase life insurance, your loved ones won’t have to manage these costly end-of-life expenses on their own. You’ll already have a plan in place to help pay for them.
3. Helps pay for a mortgage
Getting a mortgage means a home of your own — it also means a big financial obligation. But what if you or your partner passes away? Aside from feelings of loss and grief, there may be the threat of losing your home if a partner can’t manage the mortgage payments. The benefits from a life insurance policy can help lessen the burden for a period of time or possibly cover this entire expense. Discover how life insurance can protect your family's home in the event of your passing.
Losing a loved one is stressful enough. Moving can add more stress. If you have a life insurance policy, you can help relieve the financial burden for your loved ones so that they can stay in their home.
4. Can help pay off debts.
According to one survey, 73% of Americans pass away with debt. This can be from credit cards, mortgages, car loans, personal loans, student loans and more. Most people don’t want to burden their loved ones with debt, so life insurance can help.
If you have a loan that’s in your name, your estate may need to pay it off after you pass away. This means, if you have significant debt, your estate may have to be used to pay off your debt instead of being left to your loved ones. If you have life insurance, your family can use the death benefit for their own needs and protect it from creditors. This way, your debt doesn’t impact your heirs.
5. Can protect your small business.
If you’re a small business owner, life insurance can help keep your company running, even if you pass away. Normally, your business pays the insurance premium, which covers a “key person” in the business. This can be the owner or another important person. If the key person passes away, the death benefit can be used to help pay for:
- Small business loans and debt
- Shares in the company
- Salaries for replacing the employee
- Employee severance if the business has to close
Here’s an example. Let’s say you own a local restaurant and want to leave it to your children after you pass away, but you still have a hefty business loan. Life insurance can help your children pay off the debt and keep the restaurant in operation.
6. Can help care for aging or disabled loved ones.
If you or your spouse have parents or siblings who are financially dependent on your income, having a life insurance policy can help provide financial support for them in the event of your passing. This is especially important as they age or if they require specialized health care services.
Your life insurance policy can help pay for:
- Assisted living facilities
- Health care services and procedures
- Home health aids
- Hospice care
- Medications
- Nursing homes
- Retirement communities
- Visiting nurses
- And much more
Remember, as your parents age, they may need help with paying for care. The same goes for siblings and other loved ones with complex health issues or disabilities. A life insurance policy can help protect them long term if you pass away.
7. Can be less expensive when you're young and healthy.
With life insurance, the younger you are, the less expensive it can be. Purchasing a policy now can save you and your spouse money, and help ensure you won’t pay more as you age or as your health declines.
Even if you’re single or don’t have children, you should still think about life insurance. Someday you might want to buy a home, raise a family or start a business. Buying life insurance now – when you’re young and rates tend to be lower – will help build a solid financial foundation for the future. It can also help financially protect those who co-signed for your debts, such as student loans. For a small monthly payment, you can secure life insurance coverage for upward of $500,000 to $1 million.
8. Provides peace of mind.
One of our Amica Life experts shares why you need life insurance:
If you have people in your life who financially depend on you, it’s important to purchase life insurance. At its most basic level, the purpose of life insurance is to provide peace of mind and help protect your loved ones from financial hardship in the event of your unexpected passing. It can cover the costs of day-to-day living expenses, pay off a mortgage and fund a college education.
Think of it this way: Life insurance shows your loved ones you care. It gives them protection and financial well-being, even after you’re no longer there. Don’t wait. If you don’t have a policy, talk to an insurance professional today to learn more about the benefits, or get a no-obligation quote to see how affordable life insurance can be.
Sources
Insurance Barometer Study, by Life Happens and LIMRA.
Statistics – National Funeral Directors Association, 2023.
What Happens When People Die With Debt: Who Pays?, Debt.org, 2023.
Life Insurance for Business Owners, Policygenius, 2023.
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ALIC00924 Apr-29