Life insurance – a price burden or a necessary expense?

Life insurance tends to be one of those ‘adult’ things that people consider as they get older, but never know if they need it or not. Life is unpredictable and death unavoidable, but for some people, there’s more at stake. So, is life insurance a price burden or a necessary expense?

When life insurance is a good idea

You have people who depend on you financially.

Taking out life insurance is like investing in a safety net for your family should you die or get sick. It’ll help them to pay funeral costs, eliminate any debt and cover day-to-day expenses. Once you have student loans, credit card debt, car financing and a mortgage, life insurance is one of the only ways to pay off what you owe and keep your loved ones in the black. For people with spouses and young children dependent on their income, this is even more important. The same goes for people supporting parents or other family members.

Your financial plans depend on your income.

What’s the one risk that immediately destroys financial plans for retirement, university or homeownership? Your untimely death. If you have financial plans that rely on your income and you don’t have assets or passive streams of income to fall back on, then life insurance could be what keeps your family on track should the unexpected happen.

You’re about to go into business.

Whether you’re pursuing a business idea or joining an existing business, there might be an investment or loan involved. Getting a specific kind of life insurance for business helps to keep the business afloat without you or ensures that you and your life or business partner can pay back your part of the loan.

When life insurance might not be the best idea

You don’t need it.

The main reason for taking out a life insurance policy is to provide financial support for your loved ones if you get sick or die. But if you’re young, healthy and without debt, or you have a property or business that can be easily sold, you probably don’t need life insurance yet.

You can’t afford it.

There are lots of payment options when it comes to life insurance, and premiums are typically lower the younger you are and the fewer health issues you have. But there are more important things than insurance, such as paying rent and putting food on the table. If things change – for example, you have children – then life insurance premiums can greatly affect their financial future.

Life insurance is certainly not more important than putting food on the table, clothing your children or paying rent. Always put your current financial needs before insurance. If things change and you can think about your future financial security, then insurance should be top of the list. If the worst happens, having life insurance can protect your children’s financial future.

Life insurance isn’t necessarily for everyone

Though it’s not a must for everyone, life insurance can be crucial for preserving financial stability. Regardless of your decision, it’s always good to take stock of your situation and have a plan in place for your financial future. The more information you have, the better prepared you’ll be to determine what’s best for you and your family.

Still not sure whether you need life insurance? Talk to a Global Finance insurance advisor today.

**Underwriting criteria and insurer terms T’s and C’s apply