Life is uncertain and unexpected twists certainly lie ahead. If you would stay ahead of the lot by ensuring financial security, then life insurance is the option. Let’s dive into six relatable reasons why you should consider buying life insurance and ensure that your story continues, irrespective of the roadblocks ahead!
It is no secret that life insurance provides financial security to our loved ones in our absence. Insurance could be the last on our list when it comes to managing our finances. However, it shouldn’t be the case. Here are six reasons that will make you think otherwise and why you should consider buying life insurance.
When should I buy life insurance?
There is no specific time to invest in a life insurance policy. However, keeping these timelines in the loop will make the decision a better one.
- When you feel like you have reached a milestone in your life. For example, a new job, a business, marriage, or buying a house. In other words, it is better to secure yourself financially at the stages that call for such responsibilities.
- You might think your health and age don’t demand life insurance, but the younger and healthier you are, the more affordable the premiums tend to be.
- If you have people who rely on your income or financial support, such as a spouse, children, or aging parents, it’s important to have life insurance in place to ensure their financial well-being.
- Existing debts like loans and mortgages should be a major reason for purchasing life insurance.
- If you have long-term financial goals, like your children’s education or retirement planning, then it is time to purchase life insurance.
6 Reasons to Buy Life Insurance
Marriage and all things family
Getting married is a new phase where financial obligations are certainly on the rise. Joint life insurance policies, policies to cover the mortgage, children’s education, and other expenses that may arise in the family.
In addition, it will lift the weight of the funeral expenses on your family, which is an inevitable expense. Having life insurance will make sure you have all such expenses covered.
Bridging the gap by replacing the lost income
Maintaining financial stability for your loved ones, even in your absence, will give you a sense of relief. For instance, if your family depends on your income and you pass away, the income stream abruptly stops. This loss of income can create a significant financial gap for your family, making it challenging for them to cover everyday expenses, pay bills, and maintain their standard of living.
However, life insurance fills that financial gap and ensures a steady income flow for your beneficiaries. It provides a lump sum payout or regular payments replacing the lost income. Therefore, they get to maintain financial stability and meet similar obligations.
Lightening the debt load
Mortgage, car loans, credit card balances, or student loans can become a significant financial challenge for your family in your absence. However, moving forward with a clean slate is what everyone would like. Therefore, your beneficiaries can use the payout from a life insurance policy to pay off those outstanding debts.
Life insurance is a tool for retirement planning, enabling you to embrace financial freedom and pursue your dreams in your golden years. By selecting a permanent life insurance policy with a cash value component, you can accumulate savings over time. Therefore, you can take care of yourself with a properly planned policy.
Diversifying investment and growing cash value
In addition to financial protection, life insurance policies, such as permanent life insurance, offer an investment component known as cash value. This cash value can be invested in various options, such as stocks, bonds, or mutual funds, allowing you to diversify your investment holdings.
Similarly, most permanent policies build on cash value, which grows over time tax-deferred. Therefore, you won’t owe taxes on the cash value growth until you withdraw or borrow against it.
Life insurance helps you plan your business
If you own a business, opting for life insurance will ensure the continuity of the business. For instance, the proceeds from the policy can be used to fund buy-sell agreements, facilitate a smooth ownership transition, cover operational costs, or repay business debts.
Similarly, it offers financial security for your business partners or key employees in the event of your untimely passing.