When you buy life insurance, you’ll be making payments to your life insurance provider. In return, your provider agrees to provide lump sum monetary benefits to your beneficiaries/beneficiary upon your death. Aside from the cash benefits, one of the main purposes of a life insurance policy is to provide you peace of mind because having this kind of coverage means that your insurance payout would in some way ease the financial burden in the event of your death. The question is, do you really need life insurance? To answer this burning question, consider these crucial questions.
Does Anyone Depend on You For Financial Support?
This is undoubtedly the most vital question you need to consider. If you don’t have dependents—wife, children, aging parents, siblings, etc.—you might be able to live without life insurance or having just enough to cover unpaid debts and your funeral costs. On the other hand, if you have a family or other dependents counting on you for financial support, particularly if you are the breadwinner, you could take advantage of your life insurance coverage as a financial tool to ensure that your dependents stay afloat upon your untimely demise, explains one of the top insurance brokers in Raleigh, NC.
How Old or Young Are You?
If you’re significantly older, you probably won’t need as much coverage, unless your spouse is significantly younger than you or have your kids who rely on you for financial support. If you are younger, however, the chances are that you can easily lock in low insurance rates. A life insurance policy is also a great backup to have if you’re planning on having a family later on.
How’s Your Overall Health?
If you’re not exactly healthy for your age, have a job that’s considered risky, and have a family history of health conditions, you probably need a life insurance policy. Unfortunately, if you need life insurance coverage specifically because of these reasons, you’ll most likely have to pay higher premiums. Fortunately, you could opt to obtain a waiver of premium rider that you could add to your insurance plan. This would help make certain that your policy would remain in effect if you suddenly become disabled or ill and unable to pay off your premiums.
How Much Debt Do You Have?
If you pass away with an unpaid debt, either from medical expenses, your mortgage, or credit card bills, the amount you owe would probably be taken from your estate. Purchasing a life insurance plan, even when you are still childless and single, could be a wise move. Otherwise, your joint credit card holder or loan co-signer would have to pay back every single cent of what you owe.
If you decide that you need life insurance, make sure to inform your insurance plan’s beneficiary. This is extremely important since every single year; insurance policies worth millions of dollars go unclaimed due to the simple fact that the beneficiaries weren’t aware that they were beneficiaries of an insurance policy. To ensure that your beneficiaries receive what you left them, tell them about your insurance plan.