For many people, their first time of getting a life insurance is when a friend or a friend’s friend obtains an insurance license. For some others, a close relative or friend passed away without adequate insurance or life coverage.
Unfortunately, however, this is how a lot of persons get life insurance: They don't purchase it, they are promoted to them. But do you really need life insurance or is it just an inconvenience the seller is pushing right under your nose? While the latter may seem true, there are a lot of reasons why you should buy life insurance.
As we get older, get married, start a family, or start a business venture, we must understand that life insurance is absolutely essential. For instance, imagine a safety net. Without a doubt, you may be the best tightrope walker in the world. You can act without a net, but "why?" You appreciate your life and the lives of the persons close to you and so you would do nothing to show that you feel different. Let us face it; we have no control over unexpected events or the unpredictability of life. Haven said that, just as a safety net protects lives from uncertainty, so does life insurance. It is an essential and indispensable foundation for a solid financial plan. Life insurance over the years, has given many responsible and caring individuals the peace of mind of knowing that funds will be made available to protect the most important people in their lives, their family, and their property in many ways, including:
1. Payment of final expenses
The cost of burial and funeral can easily run into the tens of thousands of dollars, and I do not want my parents, wife, or kids to suffer both emotionally and financially when I die.
2. To cover the expenses of the children.
Like most responsible and caring parents, it is essential to ensure that our kids are well catered for and can afford a quality college education. This is the reason why the additional coverage is absolutely necessary while the children are staying at home.
ALSO READ: Procedure for Auto insurance claim
3. Spouse Income replacement
If a parent dies when the kids are still young, the surviving parent will have to replace that income, which is vital to their lifestyle. The surviving and responsible parent has to do the house chores, such as cleaning, cooking, and laundry. Add to this equation if you are a single parent, and take your kids to doctor visits, and help with homework.
4. To pay off debts
Apart from providing income to cover daily living expenses, the family will need insurance to cover mortgage debt, so they don't have to sell the house to pay bills.
5. Purchase of shares of business partners
In a business partnership, the parties involved require life insurance for each partners. This is done so that if one of them dies, the others will have sufficient funds to purchase their share from their benefactors and pay their own part of the obligation of the company without having to sell the company. They had the same needs (because of the risk of death of one of the partners), and at the same time they bought the life insurance of the other.
6. Pay property taxes
Property taxes can be prohibitive, so having the proper insurance to pay them is vital to avoid putting your retirement assets or money at risk. The use of insurance for this purpose is more common on larger properties, and permanent (not term) insurance is used to make sure that coverage continues until the end of life.