A life insurance is a form of protection against the financial consequences of the sudden death of the insured individual. The beneficiary, which is usually the spouse or children, will receive the proceeds. When you buy a life insurance, you are actually buying protection, security and, of course, peace of mind.
However, some people dislike the concept of paying a company for something that they won’t have a use of at present. For them, obtaining an insurance policy is and will never be a sound investment.
Is that really the case? Let’s explore the topic further.
Financial security through life insurance
Before anyone must purchase a policy, he or she should consider his or her current financial situation. What is your current standard of living? Do you want your loved ones to maintain such? Do you have enough savings so that your dependents can continue living the lifestyle that they want? Coping with a death in the family is serious enough, and abrupt lifestyle changes can only interfere with such. Further, it would take years before your children to cope with these changes.
Even if you think your family will adjust well after you’ve been gone, there will be major financial responsibilities. Who will foot the final hospitalization bill? What about your funeral costs? On average, you will need about $5,000 to $8,000 to cover the funeral expenses. Such amount is hard to come by unless you and your family have emergency funds.
What about the ongoing expenses such as education and amortization that is well covered when you are still alive? When you die, future income is already lost. Even if your spouse and elder children are already earning, there is still a difference when there are at least three family members who contribute to the monthly expenses. Will you risk your dream home or your children’s dream of becoming somebody someday?
From these considerations, we can say that a purchase of a life insurance is indeed a good investment. Investment in the sense that we are protecting the future of our loved ones even after dying. A coverage is the simplest yet most essential protection available that also ensures that future needs of every family member are met.
True enough, the only certain thing in life is change, and death is a major inevitable change that we had to face. We all have an adversity contemplating our own death. However, a life policy presents itself as a proactive death planning tool. If you care about the future of your dependents, it is surely worthy to invest in one.