Life insurance is a contract between the policyholder and the insurance company where the insurer pays a lump sum. It’s a financial tool to support your loved ones during your death. However, with opposing opinions about the value of life insurance, you may be wondering if it’s something you should just steer clear of. In this post, we’ll explore several reasons you probably need it.
You’re In a Dangerous Line of Work
In essence, life insurance is a precautionary measure to make arrangements for disability, loss of income due to illness, or premature death. And if your job is considered high-risk, you have a higher chance of becoming terminally ill or passing away than those who work all day at the office.
High-risk jobs include firefighting, mining, truck drivers, construction, police officers, and aviation. Your employer may provide group life insurance if you work a high-risk job. These policies are relatively limited, so getting a quote comparison for supplemental life insurance would be wise.
Life insurance will be more expensive if you’re high-risk based on your job. However, you can still find a low-cost option by taking a few extra steps:
- Work with an independent insurance agent to find the most affordable policy.
- Every insurer assesses risk differently. So, take your time to shop around.
- Read company reviews to narrow down your options.
You’re Going to Be A Parent
Having a baby is a motivator or prime mover to get life insurance coverage. While it’s not exactly on your radar, considering what may happen to our families in an emergency is an unpleasant thought.
You’ll likely get the best interest rates if you undergo a medical exam before or after pregnancy. But suppose you are already carrying a baby and urgently need life insurance. In that case, some insurers will let you retake the exam at least two years after the pregnancy and tailor your interest rate accordingly.
Additionally, whoever is your beneficiary on your life insurance policy will receive the entire death benefit tax-free. However, some states won’t let you name a minor as a beneficiary. Even in places where it’s permitted, experts recommend naming your legal guardian or spouse instead.
You’re Financially Caring for Your Aging Parents
Your parents may have already bought life insurance to complement their retirement planning. However, about 10 million millennials in the U.S. support their parents financially, according to a 2018 report.
Life insurance with a long-term care rider is the best way to pay for the costs if you care for your parents in a nursing facility, assisted living, or home. This insurance acts as a living benefit that allows you to access some of the policy’s death benefit monthly to cover long-term care expenses.
It also doesn’t require submitting receipts or bills for the care. Best of all, long-term care benefits are generally not liable to tax.
You’re a Thrill Seeker
People with extreme extracurricular activities are deemed high-risk by insurers. Hobbies like skydiving, rock climbing, or something equally heart-racing are considered extreme. You’ll have to pay more to be insured, similar to having a dangerous job.
Still, the cost is of value, considering the high probability you’ll get injured or die from unnatural causes.
You might think that you can just lie about it. However, suppose you die within the active years of your policy and don’t inform the insurance company about your regular high-risk activity. In that case, the insurer can cut down the value of your death benefit or call it off.
You’re Getting Married
When you were single, you might not have had anyone financially depending on you. That will change when you get married. If you and your partner count on each other’s earnings to cover your lifestyle, you need a policy to keep your family getting by if something happens.
Additionally, when you get married, life changes. But how it changes relies on how you plan the next chapter of your life from there on. It’s the perfect time to sort out your financial plan; life insurance is the cornerstone.
A life insurance plan should go hand-in-hand with your vows. Individual life insurance can be more advantageous than a joint life insurance policy. One advantage is that everyone can look for a life insurance policy that best suits their gender, age, needs, and health conditions.
Term life insurance may be ideal since it’s the most affordable type. Still, permanent life insurance policies can be an excellent option for married couples who want an investment or savings component policy.
The best life insurance type for you and your life partner depends on your financial goals, health, and age.
The best way to save money on life insurance is to purchase a policy when you’re young. The healthier and younger you are when you get the coverage, the more affordable it is. So, start young. Also, consider paying more for a policy with a more significant benefit to ensure the payout will be sufficient for your dependents to cover future expenses.