If you have ever thought about whether purchasing life insurance is worth it, the answer is a definite yes, especially if you have a spouse, children, or other family members who are dependent on you financially. However – why is that? Why is buying life insurance worth it? Well, keep reading if you want to find out this and more.
What is life insurance?
First things first, you need to understand what life insurance actually is. To put it simply, life insurance is an insurance policy that, in case of your death, will pay out money to whoever you stated as the ‘beneficiary’.
The most common ‘beneficiaries’ are partners, children, or family members that are dependent financially on you. However, a ‘beneficiary’ doesn’t have to be a member of your family or even a particular person. For example, some people buy life insurance and choose a charity as a ‘beneficiary’.
If you decide to purchase it, you agree to pay a specific amount of money every month, which is also known as a ‘premium.’ Some insurance companies can also pay out the money earlier in case you are diagnosed with a terminal illness.
Why is buying life insurance worth it?
The main reason why you should buy life insurance is that if anything happens, the money from it might make the lives of your loved ones easier. Of course, it won’t compensate for the loss of a family member, but at least they will be able to grieve in peace without thinking about how they are going to survive.
As you can read in the Anorak life insurance guide, “Life insurance is usually taken out to support your family’s financial needs after you die, especially in cases where their fundamental way of life is dependent on your income.[…] it is a way of providing the money your family would need to do essential things like keep a roof over their heads and continue paying for living expenses like food and bills if your income was suddenly missing”.
Buying life insurance is a good idea even if you don’t have a family on your own, as if anything happens, it can be used to pay for the funeral and pay off any debts that you might have.
When should you buy life insurance?
Now that you know that life insurance is important, there is a question of when you should invest in it. Most people don’t think about it unless something significant happens in their life – for example, they have a child. That’s completely understandable.
However, the thing with life insurance is that it is one of those things that are cheaper if bought earlier. So, if you are a person in your 20s, you will pay less than a person who is in their 50s. That’s because when you are older, you are more exposed to many illnesses that can be fatal, as your immune system is getting weaker with age.
Another thing is that if you decide to buy life insurance later in life, for example, when you’ll be in your 60s, you will most probably have to purchase whole-life insurance instead of a term one.
How much does life insurance cost?
When it comes to how much does life insurance cost, there are several factors which affect the amount you will have to pay every month. Those include your age, health history, whether you have any dangerous hobbies, what type of policy and for how long you want to buy, and so on. What’s great about life insurance is that with just a few pounds spent every month, you can get a cover of hundreds of thousands of pounds.
Just like with everything else that requires your long time commitment, you need to choose one in which you will be able to afford the monthly fees. Also, look for one which will suit your needs and covers everything it should like a mortgage.
So is buying life insurance really worth it? The answer is a definite yes. Money might not ease the pain of losing someone close, but it will definitely make life after it, at least a little bit easier. Think about it.