Life Insurance: Why You Need It and What to Get

Updated on June 29, 2021

Every person dies eventually and unfortunately sometimes without warning. You can prepare for the unexpected and save your loved ones a lot of grief by having life insurance. Read on to discover why you need life insurance, what type is right for you, and what amount you should make your policy for.

Why You Need Life Insurance

Everyone experiences unforeseen moments in life from news of a baby on the way to tragic car accidents. Having life insurance ensures you are prepared and will not leave a huge mess behind to clean up. It is super easy to get too. Nowadays, life insurance plans online and quick comparisons make it possible to gain affordable coverage in as little as one day from anywhere, so there is no excuse not to get it.

You may think you do not need or want life insurance, but there are many reasons you should. If any of these apply, then you should think about life insurance.

1. You will have death expenses

Funerals and celebration of life parties cost money and it is often an expense that the ones you leave behind cannot cover on their own. Corpse disposal adds to the expense depending on whether you want cremation, burial, cryogenic freezing, etc.

2. You have family

If you are single, your parent, sibling, or another family member will still have to settle your debts. If you have a spouse and/or kids then you have more need for it, especially if they depend upon your income.

3. You want to leave money behind 

Even if you are debt-free and have enough set aside for your death-related expenses, chances are you still may want to leave behind some money if able. 

4. You have debt

Student loan debt, credit cards, and a car loan all can leave your loved ones with unexpected debt they have to manage.

5. You own a business

If you have your own business, then life insurance may be necessary so the business can be properly sold, dissolved, or bought when you pass.

What Type Works Best for You

Term and permanent are your choices. Term life insurance is coverage for a set length at a set rate and pays out a finite amount. Permanent is more like creating a perpetual savings account that changes over time. You can also usually borrow against permanent life insurance. Permanent tends to be more expensive, but the versatility can be worth it. You need to figure out what you want from it and what needs to be covered to decide which type to acquire.

What Amount Is Right for You

A good rule of thumb for figuring out your desired coverage amount is to multiply your yearly income by 10-15 plus a little extra. If you have dependents, an exorbitant amount of debt, or elaborate or unique death plans, then you will need more coverage. It is always best to plan to have a little extra in your policy than just your basic needs too. When making this decision remember it is always better to have more coverage than less, as long as you can afford it.

Don’t get caught off guard and let your loved ones suffer the consequences. Get a life insurance policy today because life is not a guarantee.

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