Why Life Insurance Is So Important

We’re excited to announce that September is Life Insurance Awareness Month. Each September, SelectQuote, along with insurance companies across the country, partners with nonprofit organization Life Happens in an industry-wide campaign to educate Americans about the critical importance of life insurance. Over 70 insurance organizations are participating this year. So let’s get right down to it and why life insurance is so important? There are six common reasons people choose to purchase life insurance. We’ll dive into each of them shortly. As you’re reading, think about how many of these reasons apply to you. Understand that purchasing life insurance is a personal decision and everyone’s needs are different. Even if you don’t need life insurance right now, it’s helpful to understand when and why you may benefit from it in the future.

Reason #1: Dependents. If you’re a parent, you worry about your kids because you love them so much. Not only do you want the absolute best for them, you want to be around to see them grow into successful, caring adults and to perhaps have kids of their own someday. What if you and/or your spouse pass away prematurely? Even if you have a family member or guardian who could step in to care for your kids, they may lack the financial means. If you have dependents such as an aging parent, life insurance can have a powerful impact in covering their cost of care.

Reason #2: Substituting lost income. If you are the primary wage earner for your household, the loss of your active income could cause significant financial stress on your family when you die. In fact, one in three U.S. households report they would have immediate trouble paying living expenses following the loss of a primary wage earner.[1] A life insurance policy can help substitute any lost income and help avoid financial stress.

Reason #3: Funeral expenses. Nobody wants to talk about death or memorial services, but shunning the subject altogether could put your loved ones in a difficult situation both financially and emotionally if you pass away unexpectedly. Most people do not realize how costly funeral expenses are until they experience a loss and need to make arrangements. Funeral costs and expenses commonly average $10,000 but may reach the $20,000 to $30,000 range.[2]

Reason #4: Ongoing living expenses. The single largest concern Americans have regarding money and mortality is being able to protect their families financially and provide the means to cover monthly expenses.[3] Life insurance can provide the peace of mind that day-to-day living expenses such as food, housing, utilities, child care, education and transportation will be covered for your family if the unthinkable were to happen.

Reason #5: Outstanding debts. Don’t overlook your current debt balances and loans you anticipate taking on in the future when considering life insurance. Perhaps you have a mortgage, auto loan, small business loan, medical bills, credit card debt or graduate school loans you’re still trying to pay off. A life insurance policy can provide your beneficiaries with sufficient funds to quickly pay off your loans and settle your accounts stress-free. The peace of mind is priceless.

Reason #6: Protecting assets. Think about the assets you currently own. When you die, your family may have the option to sell your assets to settle debts and cover expenses, but they may not actually want to sell.  Liquid assets such as a house or business equity can often times take time to sell. Additionally, some assets like jewelry may sell for less than their appraised value. If there are assets you want to remain in your family’s possession after you’re gone, such as property or family heirlooms, a life insurance policy can help.

So there you have it. The above six reasons explain why life insurance is important. Be on the lookout for more insightful insurance articles this September during Life Insurance Awareness Month. Here are a few other informative life insurance articles to get you started.

[1] Durham, Ashley, “2016 Insurance Barometer Study,” LIMRA, August 2016.

[2] Buck, Valerie Michel, Jed Winegar, “What should I expect to pay for funeral and burial expenses,” NCPC, February 26, 2016.

[3] Durham, Ashley, “2016 Insurance Barometer Study,” LIMRA, August 2016.

###

Curious how SelectQuote, America’s #1 independent term life sales agency, can help you find a life insurance policy that’s right for you? We impartially shop the highly rated insurance companies we represent to find you the right term life policy to fit your budget and your needs.  Start your free quote today.

Leave A Reply

Navigate