If you don’t think your life is worth insuring, you may want to think again. Having a life insurance policy can help provide for children, most obviously. Less often discussed, though, are the ways it can help your spouse, parents, business colleagues and the world at large.
Here are eleven reasons to get life insurance today.
Cover funeral expenses.
The median cost of a funeral in the US is $7,640. It can get far more expensive than that depending on where you live and how you want to be buried. If you don’t leave enough money to cover these expenses, your loved ones can be left holding the bill -- often having to make difficult decisions about money during a period of deep grief.
A life insurance policy can alleviate or even completely remove this burden, especially if it is held in combination with a will and properly structured trust to ensure quick access.
Replace lost income.
Whether you have children or not, there is likely someone who is reliant on your income. You might have a spouse who would have to change their living situation or quality of life if you passed away. Your life insurance policy could keep them stable for a few years while they figure out next steps. Of course, this becomes even more true if you have children.
Your parents may or may not need your financial help at this current point in time, but many seniors are not prepared for retirement or the health challenges that can come along with it. Your life insurance policy could help provide for them in their later years when they are no longer able to provide for themselves.
Pay off joint debt.
Let’s say you have a mortgage with your life partner or spouse. If you pass away, they’ll be on the hook for all of the debt with only a portion of the income.
A life insurance policy can ameliorate this situation by providing your partner with enough money to cover your portion of the total debt. At this point, refinancing may be an option for them to secure more affordable monthly payments.
Your life insurance policy can be used to pay off all kinds of joint debt, including credit card debt and car notes.
Take care of your business affairs.
If you’re a small business owner and have a life insurance policy, in some cases you’ll be able to leverage the death benefit on that policy for credit access. Essentially you’re saying, ‘If I die, this money will definitely be there to pay off my business debt.’
In the event you do pass away and you have business partners or employees who rely on you for income, you can set up a life insurance policy with a buy/sell agreement. Work with an estate lawyer to ensure the money will be used to pay salaries or pay out to your partner in accordance with your wishes.
Pay for college.
College is expensive, and unless the upward trend is interrupted, it’s going to be even more expensive when your children attend. Life insurance policy money can help cover the costs of higher education, giving your children access to a potentially higher income for the rest of their lives.
Cover estate taxes.
If the money you leave behind is abundant enough, your family may be left paying estate taxes. If you factor these in when determining your coverage amount, your life insurance policy can be used to effectively offset these taxes.
Leave an inheritance.
You may not make enough money during your life to leave a large inheritance to your loved ones. But with a life insurance policy in conjunction with a will and trust, you can leave a financial legacy.
Give to charity.
Even if you don’t have anyone specific you want to leave money to, you can still leave a legacy. Structured properly within a trust, the payout from a life insurance policy can be used to make meaningful charitable donations after you have passed on.
Using a portion of your life insurance payout for charitable donations can also be used as a tax-saving strategy in select situations for those who do plan on leaving an inheritance to loved ones.
Lock in lower rates.
The younger you are when you purchase a life insurance policy, the lower your premiums will be. By applying for life insurance today, you’ll lock in lower rates which -- in most cases -- last the duration of your policy.
You can afford life insurance.
It may be surprising to hear, but for many people, life insurance is incredibly affordable. The average user that gets life insurance through Tomorrow’s marketplace pays premiums of just $26/month.
Peace of mind.
At the end of the day, a life insurance policy ultimately brings you peace of mind. Whether you’re worried about providing for your children or elderly parents, want to make a difference for a charity or secure your employee’s salaries, having life insurance means you can rest assured that those you’re leaving behind will be taken care of in your absence.