Should I Buy Life Insurance? 5 Reasons You Might Need It

Life insurance is an essential part of financial planning. Despite this, many people don’t have the coverage they need. According to the 2018 Insurance Barometer Study from LIMRA, only about 60 percent of people in the US. Have life insurance, and about 20 percent of people with coverage say they don’t have enough.

If you don’t have coverage, now is the time to get it. Here are five reasons you might need it.

Reason #1: Because Funerals Are Expensive

In the United States, a typical funeral can cost between $7,000 and $10,000. This includes the cost of the casket, embalming, the grave site, a headstone, funeral home costs and other common expenses.

If this seems like a lot, it is. Many families are living paycheck to paycheck with little in emergency savings. They might not be able to afford the cost of an unexpected funeral. Life insurance can cover this cost.

Reason #2: Because Medical Bills Add Up Quickly

Before a person dies, they may require medical care. Hospital bills can easily amount to thousands of dollars. The family may be billed for these costs, or the costs may be paid by the estate, reducing the amount the heirs receive.

A life insurance policy can cover medical costs, so loved ones aren’t saddled with this potentially huge expense.

Reason #3: Because Childcare Is Valuable Too

It’s commonly recognized that a family’s primary breadwinner needs life insurance. If that person dies, the family will need a new source of funds in order to get by.

What many people overlook, however, is that stay-at-home parents are also delivering a valuable service. Losing this service could result in a significant financial burden.

Childcare isn’t cheap. According to a survey from Care.com, a nanny costs about $596 per week on average, and a childcare center costs about $213 per week. If a stay-at-home parent dies, the surviving spouse may need to spend thousands of dollars each year on childcare. Life insurance can provide funds that will cover the cost of childcare.

Reason #4: Because You Have a Mortgage

If your family owns a house, you probably took out a mortgage to pay for it. Zillow’s Consumer Housing Trends Report for 2018 found that 85 percent of first-time homebuyers have a mortgage.

A mortgage is often the biggest debt a person has. If you die before the mortgage is paid, your family will have to finish paying the mortgage or lose the house. Life insurance can cover this cost. It can also be used to settle other debts.

Reason #5: Because You Want to Provide for Your Family – No Matter What

No one knows what the future will hold. You want to make sure that your family will be taken care of no matter what happens. Life insurance is a practical way to do this. The payout can make up for lost income, provide childcare, pay for college tuition and more.

Thinking you might need life insurance? It’s more affordable than you might think. Get a quote here.

Sources
  • https://www.iii.org/fact-statistic/facts-statistics-life-insurance

  • https://www.parting.com/blog/funeral-costs-how-much-does-an-average-funeral-cost/

  • https://www.care.com/c/stories/2423/how-much-does-child-care-cost/

  • https://www.zillow.com/report/2018/

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