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Today we have guest blogger Carmina to share with us the importance of Life Insurance.
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Mortality isn’t something we are fond of discussing over dinner. But the truth is life happens and getting sick, growing old, and facing death are all parts of life. Even though these risks are inevitable, it would still be essential for you to have a safety blanket, like life insurance, to protect your family or dependents should anything happen to you.

Life insurance is a contract between you and an insurance company. The company agrees to pay your beneficiaries a pre-determined amount of money in exchange for monthly “premiums” you pay for the agreed coverage. You have two basic options: term life insurance and whole life insurance. Term life insurance is designed to give financial protection for a specific period of time, generally ranging from 10 to 30 years while whole (permanent) life insurance is designed to provide lifetime coverage.

If you’re 20-ish and you’re reading this, you might probably think that this article isn’t for you since it talks about family, death, financial security, and all those things that aren’t part of your current priorities. Life insurance, just like other investments, requires time. The best time for you to buy life insurance, you may ask? Today. Here are five reasons why.

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1. You’re young, healthy, and vigorous today

Life insurance is issued on a rating scale wherein the perceived risks are measured based on age, medical condition, smoking habits, hobbies, and occupation. The healthier you are, the lower the perceived risk, and the cheaper the premium can get.

The longer you wait, the more it’ll cost you. According to Brian Frederick of Intrinsic Wealth Counsel in Arizona, folks 50 or older have a hard time buying coverage, either because the premium has become more expensive or these folks have become medically unqualified. So while it’s not too late and your hairs haven’t turned gray yet, consider being insured.

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2. You might not be single for the rest of your life

Frederick also noted that people who are in their 20s won’t buy life insurance because they feel invincible. You see your rates and savings getting higher as your careers thrive. You provide for yourself and enjoy fewer responsibilities. But as you reach your 30s? That is when reality kicks in.

When you start a family and your loved ones rely on you, you’ll realize the importance of having life insurance. You also consider your children’s expenses like food, medical bills, and most importantly, their education and how you’ll be able to send them to their dream university. You’ll also start anticipating the unseen future. Are our savings enough? What if I lose my job, or what if my wife loses hers? What if I retire early? Who will support our children? Buying “peace of mind” will help ease the weight of these worries.

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3. Life is short and full of surprises

It seemed like a normal day. You kissed your spouse goodbye, stepped inside your car, headed to work, and poof! You didn’t see that truck coming. Life is unpredictable, and life insurance helps you and your family sheltered when life plays a little game on you.

For instance, if you have to stop working due to an accident or illness, life insurance can cover for your hospitalization and health-related expenses. It’s as if you’re saving money to make up for your loss of income when these mishaps take place. Some insurance policies can also provide you income if you get into an accident.

Life insurance also provides for your dependents and replaces your economic value and when you’re gone. Aside from paying memorial costs, you don’t have to worry about your outstanding loans and debts, your family’s monthly bills, living expenses, and estate taxes, and your spouse’s retirement. When you’re insured, these are all covered.

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4. Your parents are growing old

Okay. Let’s say you have no plans of starting a family and you prefer living alone with your pets. In this case, you probably don’t need to buy life insurance yet since no one will carry burdens if you’re gone. Unless you still have aging parents or guardians who might be dependent on your income for their retirement. As a way of giving back since they worked hard to feed you, struggled to fund your education, and raised you with love, it might be nice to have them as your beneficiaries.

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5. You will retire

Aside from unexpected deaths, having a life insurance works also if the universe grants you a longer life. Being insured means you won’t be a financial burden to your family when you get old and lose your source of income. In fact, having a life insurance plan is best for your long-term goals such as your dream retirement. The returns of your money using life insurance are higher than bank savings account and time deposits. If you structure a permanent life insurance policy properly, you can use the cash value to help fund your retirement and these are tax-free. 

Author Bio:
Like other young adults, Carmina Natividad also experiences struggles in saving money, yet she finds a way to become a responsible spender. She shares her views on personal finance issues by being a daytime writer for Speedy Money, an Australian-based business, providing short-term borrowing solutions.