Beginners Guide to Life Insurance: What to Know

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life insurance

Getting an appropriate life insurance is a vital financial decision that’s often overlooked, especially by young people who are busy chasing their dreams.

While there’s nothing wrong about investing on your goals as early as you possibly can, the best time to purchase life insurance is actually when you’re young, healthy, and thriving.

Understandably, when you start making money, you’ll feel encouraged to spend on things that you believe will make you happy.

So, when you’re having fun in the moment, it can indeed be easy to dismiss life insurance as just another unnecessary expense.

However, your future self will eventually thank you if you decide to get one today.

Why Is Life Insurance Worth Getting?

Having life insurance can literally be a lifesaver for you and your family. It serves as a protection that can give you peace of mind, especially when the unexpected happens.

Naturally, some people may be having doubts because being an adult already entails a lot of financial responsibilities. Do you really need to set aside funds for insurance on top of all the bills you’re paying?  In a nutshell, yes, especially if you have dependents.

You don’t have to give up a huge part of your funds in order to get insured. In fact, there are affordable life insurance policies out there that will fit your needs just fine.

Still hesitant about whether life insurance is worth it?  Here are some reasons why you should consider it, for the sake of your future:

Achieve Your Goals Easier

A person’s financial commitments with insurance policies will typically last for years. Thus, to fulfill your insurance responsibilities, you’ll need to properly plan out how you’ll be allocating your income for the next few years or even decades. As a result, you’ll develop the discipline that’s necessary in order to achieve your life goals.

Whether it’s a medium-term goal, like buying a home, or a long-term one, like preparing for your retirement, an insurance policy ensures that you’ll be covered in terms of health and finances. That’s because most policies also come with investment options that can help you further grow the money you’ve been saving.

Be Ready For Unexpected Circumstances

You may be doing everything you can to ensure that you’ll age in the best way possible. However, accidents do happen and when you’re forced to deal with one, it can be pretty costly when you don’t have life insurance.

If you’re insured, the financial difficulties you’ll face won’t be as difficult compared to when you don’t have one. The future is never certain, but with an insurance policy, your family wouldn’t have to go through the trouble of financial uncertainty.

Keep Your Family Financially Secure Even When You’re Gone

If you have a family who relies on you, purchasing life insurance is one of the best things that you can do for them, especially if you ever die suddenly. Your insurance will replace your lost income, something that will be incredibly helpful for your spouse, as your household needs both of your incomes to maintain your current lifestyle.

This becomes incredibly important if you die and your children are still studying. Your insurance can help put them through school, and, in some instances, it can even help them purchase a home or pay for their wedding.

Ensure The Survival Of Your Business

For those who also own a business, you’d be glad to know that insurance policies aren’t only for you and your family’s security. Some of them can also help you with your business.

For example, having an insurance plan makes the buy-or-sell agreement process more convenient should you die during the insurance term. This means that your business partner will have the capacity to buy your shares and cover your financial responsibilities without needing to sell your company.

Pay Off Debts

Debts, like car loans, credit card consolidation loans, home loans, or mortgages, are another potential problem that your family might run into in your death. Such a loss is already stressful enough for them, and it can worsen if they still need to worry about where they’re going to get the money to pay off the debts that you left them with.

Fortunately, this can be taken care of by the right insurance policy. Hence, your family wouldn’t need to do drastic measures, like selling your house, just to clear the credit.

Build Wealth For Your Retirement

Getting a life insurance plan is also a great way to make your post-retirement life more comfortable. You may think that retirement is still a long time for now, but the earlier that you invest in it, the less financial problems you’ll have in the future.

In a way, putting money in your life insurance has a lot of similarities with a pension plan. When you retire, you’re bound to get a steady stream of income each month, all because you’ve planned for it when you were younger.

Feel At Peace Knowing That You Won’t Leave Loved Ones With Nothing

No one wants to worry about their loved ones’ future. As much as you want to always be there for them, death simply makes that impossible. However, a life insurance policy will make your family feel cared for despite your passing.

Hence, you can just enjoy the rest of your days with them, knowing that you made sure that they won’t be left in shambles. That way, it’s easier to feel at peace, live in the moment, and make the most out of your time here.

Get Your Funeral Expenses Covered

It may be strange to put the concept of death first when talking about “life” insurance, but funerals are among the instances where a life insurance can be extremely useful. People usually think that huge payments end with death. Unfortunately, it’s just the start of new ones.

To illustrate, even basic funerals can cost as much as $7,000 to $10,000. With this, it’s easy to see why even “dying” isn’t cheap. A death in the family can be emotionally, mentally, and financially draining for the loved ones who have been left behind. Life insurance can at least minimize the financial pains that they have to go through.

Is Life Insurance Necessary Even If You Don’t Have Dependents?

Even if you don’t have children or family members to whom you can leave your savings after you’re gone, getting life insurance will still benefit you in some way. As mentioned earlier, life insurance can be used to cover your funeral expenses. This will greatly lessen financial issues for your loved ones and minimize the possibility of them going into debt.

Some policies will also invest a part of your payments on mutual funds. Thus, not only will you be able to secure yourself should you come across any unfortunate circumstance, but it also gives you the chance to truly enjoy your retirement.

Of course, there may be instances when life insurance wouldn’t be necessary, but like everything else, it’s a case-to-case basis. Overall, it’s still better to know what your options are so you can go for the decision that will benefit you the most in the long run.

How Should You Choose Your Life Insurance?

Life insurance will always be more affordable when you get it a time that you’re younger and relatively healthier. However, it’s worth noting that you can be presented with a wide variety of insurance policies depending on your preferences and priorities.

When choosing a life insurance, you first  need to answer these questions:

  • Are you getting it to keep your family financially secure, to build your wealth, or to protect your assets?
  • How old are you and what are the relevant circumstances in your life?
  • Where are you in your life right now?  Are you studying, getting married, starting a family, buying your first home, or planning to start a business?

The more specific you could be when it comes to your needs, the easier it will be for your chosen insurance provider to come up with a plan that’s most fitting for your situation. Basically, it all boils down to the things you value the most.


People may readily dismiss life insurance as a money-making scam. However, if you’ve properly done your research, you’ll realize that it’s actually something that can help you live a more comfortable life.

You don’t have to give up a huge part of your funds in order to get insured. In fact, there are affordable life insurance policies out there that will fit your needs just fine.

Yes, you may not immediately see how beneficial it is that you’re insured, or you may not even see how helpful it will be for your family after your death. The thing is, people can never know exactly when their death will come. For instance, even those who are supposedly fit and healthy can suddenly die because of a fatal accident.

With life insurance, not only will you be able to protect yourself when you fall ill, but you can also keep your loved ones secure by leaving them with something valuable. Additionally, it can help you become more disciplined and financially stable during your lifetime.

About Shannon Clark

Shannon holds a degree in Exercise Science and is a certified personal trainer and fitness writer with over 10 years of industry experience.

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