When it comes to life insurance, there are many opposing ideas out there. For example, many people assume life insurance isn’t essential until you’re ill or old.
That’s not always the case. For example, the healthier and younger you are, your life insurance premium will cost less when you invest in life insurance. Along the same vein, life insurance provides stability for your family’s financial future were you to have an unexpected death.
If you’re unsure about the other many reasons to have life insurance no matter your age, take a look at the following benefits:
Paying for Final Expenses
As we previously mentioned, the most well-known reason for having life insurance is to cover the final expenses like funeral costs. Typically, these costs are in the $8,000 to $10,000 range.
By buying final expense insurance (a type of life insurance policy), you won’t leave your family scrambling to figure out how to pay for your funeral. This way they can mourn without any extra financial stress.
The final expense portion of your life insurance coverage can help cover the costs of the following:
- Funeral service
Taking Care of Loved Ones
One of the biggest stressors that families across the United States face is finances. If you’re the breadwinner for your family, do you want to leave behind a mountain of debt for your loved ones to shoulder?
Having a life insurance policy in place can help you get things like car loans and mortgages paid off to help your family live a debt-free life. Furthermore, depending on how many children you have, your policy might give them the opportunity for things like college and other future expenses. For dual income families, each spouse should at least cover the mortgage.
Even if you are not the breadwinner for your family, you should still have a life insurance policy. For instance, if one spouse stays at home with the kids and passes away, their family will need to pay for additional expenses like childcare.
Protecting Your Business
In addition to helping provide for your family, life insurance can also help ensure your business is preserved.
How is this so? Well, many business owners tend to take out loans backed by personal assets. If the business owner dies, the family can use a life insurance policy to pay these debts.
Sure, the family could just sell the business after their loved one’s death, but they’d have to do it at a discount. In this scenario, the family would take a loss when they don’t have to if the owner had life insurance.
Your Money Is Tax-Free
If you get a permanent life insurance policy, your beneficiaries can collect the money from your policy tax-free. And you’ll be able to withdraw from your policy without having to pay taxes.
You Can Sell Your Policy to Pay for Medical Expenses
If you have a terminal disease, you’ll likely need extra money to pay for accruing medical bills. You may opt to cash in your policy through a viatical settlement or life settlement.
This agreement means the owner of the policy sells their coverage at a discounted rate and receives cash up front. The buyer gets the full amount the policy is worth when the original owner dies.