Although no one enjoys thinking about the possibility of the future after their passing, life insurance can provide your loved ones with comfort and assurance in the event of your death.
In our lives, we often experience important milestones that lead us to contemplate our future. When we consider our lives and what lies ahead, we must inevitably consider what may happen to those we leave behind. Ultimately, your dependents or next of kin may be liable for any outstanding debt or expense such as tuition or childcare costs, mortgage payments, or even funeral, medical, or care expenses.
Although you have been cautious with your finances and do not owe any debts, you may wish to either leave a legacy to your loved ones, assist with the financial support of any dependents or give a small amount towards the cost of your funeral. Regardless of what the situation may be, there are six compelling reasons to purchase life insurance.
1. It May Be Impossible To Buy It Later
Life insurance policies operate on certain uncertainties. You may be healthy now, so paying a premium for a life insurance plan may seem like an unnecessary added financial burden. Still, if you suddenly fall ill, it may be impossible for you to buy a life insurance policy then. Therefore, it is important to buy one much earlier on in your life because it remains effective when your health deteriorates later on. Although Manulife insurance allows you to attach certain benefits to your policy. Such services enhance the quality of your insurance. The CoverMe Guaranteed Issue Life Insurance, for instance, enables Canadian residents aged 45-70 with existing health conditions to gain access to health coverage irrespective of their health history.
2. Helps You Deal With Debt
No one wants their family to deal with ‘unnecessary’ financial liabilities during a crisis, such as the death of a breadwinner. Usually, any outstanding debt, such as a home loan, personal loan, auto loan, or a loan on credit cards, is handled by your insurer if you happen to buy the right life insurance policy with sufficient coverage. Your family is often dependent on you even after you’re dead, and you do not want to disappoint them. Whether it’s to replace lost income, pay for your child’s tuition, or ensure your spouse gets the desired and much-needed financial security, life insurance could end up being their only surviving chance.
3. Helps With Long-Term Goals
Life insurance is an instrument that is considered a long-term investment as it would help you achieve many of your long-term goals, such as planning your retirement or buying a home. Adequate life insurance also supplies you with numerous investment options that accompany different policy types. Some policies are linked to certain investment products that return dividends based on their performance. If you opt for an investment-linked policy, ensure to read the contracts and terms of the agreement to be fully aware of the associated risks and returns.
4. Supports Retirement Goals
Everyone desires that their retirement savings last until they do, right? Well, with a life insurance plan, you can ensure that you have a regular stream of income every month upon your retirement. Placing money in an annuity is similar to a pension plan. Place some money regularly in a certain life insurance product and benefit from a steady monthly income even after retirement.
5. If Your Job Is High-Risk
Insurance companies always consider your occupation when assessing your risk level. Simply put, if you work in a danger-filled job or high-risk environment, you have a greater chance of dying on the job than someone who works at a desk all day. For example, people who work in aviation, firefighting, construction, oil and natural gas, mining, and a few others will almost always result in a higher premium due to the high risks the jobs entail. Yet, it’s for this same high risks life insurance policies are worth having. Most life insurance policies won’t permit workers in high-risk industries to add disability riders. However, you can pay for short-term disability insurance separately to guard against temporary income loss if you get injured on the job or elsewhere.
6. Helps Your Savings
If you select a unit-like or traditional policy, you pay a monthly premium higher than your insurance costs. This bit of extra money added is then invested, and it accrues cash value. You can then borrow this cash against the policy, or you can sell it or draw income directly from it.
Finally, most people do not think about getting life insurance in their 20s. However, it’s often the best time to buy it. Various factors affect the cost of life insurance, but generally, it is cheaper for younger and healthier individuals (unless you work in a high-risk job).