Many times people don’t think about life insurance until something happens in their life that reminds them of their mortality. No one wants to think about death, especially not when they’re young and healthy. However, to get the best life insurance rates, it’s wise to invest while still young and healthy.
According to PolicyGenius, the cost of purchasing life insurance increases on average by 8-10% every year you age, so seeking coverage while you’re still young and healthy makes a lot of sense. Younger individuals may question whether they need life insurance if they don’t have dependents. This is particularly true if they view life insurance as an extra expense they cannot afford; however, it is a worthwhile investment in the long run, and it may not be as expensive as you think.
Most individuals only consider life insurance once someone is dependent on them for financial security, such as a spouse or child. However, those who are single should also consider it if they have debt they don’t want their family members to inherit.
Couples getting married or those having children need the financial support that life insurance would provide should one of them pass away. The same can be said for elderly individuals who want to ensure their death doesn’t present a financial burden for their surviving family members. If you’re not sure if you need life insurance, consider what would happen to the finances of those you leave behind. Will your spouse be able to pay the mortgage? Will your children have enough money to cover funeral expenses? If you have a young child, will they be able to afford college? These are all concerns that having life insurance can address.
In the U.S., insurance ownership over the past decade has dropped by nine percentage points to 54%, according to the 2020 Insurance Barometer Study. Despite the decrease, 36% of Americans say they intend to purchase life insurance in the next 12 months. However, intention doesn’t always lead to action.
While nearly 90% of Americans realize they need life insurance, only about 60% say they’ve purchased coverage. Those who do are likely to have insufficient coverage, which can present a real burden to surviving family members.
Being underinsured can have severe consequences for many American families. Four in 10 households without any life insurance would have immediate trouble paying living expenses if their primary wage earner died. Consider the expenses your loved ones would face without your income or contributions to daily life. Not only will there be funeral expenses to handle, but the bills don’t stop just because you’ve passed away. Will there be enough to maintain your family’s standard of living based on their remaining income?
So while it may seem off-putting to think about, considering the well-being of your loved ones in the event you pass away is essential. You can make sure your family is protected financially by purchasing life insurance. If you’re unsure how much insurance coverage you need, you can find an insurance calculator at Life Happens, a nonprofit committed to educating consumers and helping them get the coverage they need to protect themselves and their loved ones.