When I was nine, my father died. He left my mother and our four kids, who were between 17 and 9 years old, with no money. I did miss him, but I didn't know much about death or loss when I was nine. Even though it sounds selfish, I really missed the way we used to live. We had to move because the house we were living in was owned by the company and we couldn't stay there any longer. We had to give up our car because the company also gave us one. We could only afford a run-down house from the government. It was small and tight, and there weren't many fences around it, so we felt like our neighbours were right on top of us. All of these annoying things that had become a part of our lives added to our sadness. I don't know why my dad didn't get life insurance. All I know is that he didn't, and for a long time, we had to deal with the effects of that choice.
I've been wondering why so many people roll their eyes when they hear the words "life insurance." I can see why you might not want to think about a situation where you or your family would actually need it, but that is no reason to just ignore it and not make plans. Think for a moment about what would happen to your family if you died and didn't have life insurance.
The point of life insurance is to make sure that your spouse and children will have money to live on if you die and can't take care of them like you do now. Think about it: if something happened to you, could your family afford to stay in the house you have now? Would there be enough money to keep living the way they do now? Would the price of a funeral be too much? Would it be easy for your spouse to take care of your family? Or would the stress, sadness, and financial strain of losing you be too much for them to handle?
You might think that your family will be fine financially even though they miss you because you have saved and invested wisely and built a strong foundation. The truth is that it's not likely to happen. This is especially important for families with young kids. During this time, many families are still trying to get their feet on the ground. They may have a lot of debt and not much money saved. Taking care of children can be expensive, and their income may not be at its highest. Even though money is tight, this is often the time when life insurance is most important. However, this is also the reason why many families don't want to pay their insurance premiums every month.
But the good news is that you are a good candidate for term life insurance, which is the cheapest kind of life insurance. The premiums for term life insurance are based on how old you are and how healthy you are. Term life insurance is usually bought for a set number of years, like 1, 5, 10, 20, or any other number you choose. In the end, term life insurance offers the most coverage for the least amount of money.
Term insurance isn't great for older people because prices go up a lot as you get older, but it's a great choice for younger couples or families with high debts like mortgages, kids, and living expenses. You can be covered by the insurance while your kids grow up and your mortgage is paid off. By the time the policy runs out, you'll probably have saved money, paid off your big debts, and no longer have anyone who depends on you.
So, who really needs a life insurance policy? Since insurance is really about protecting your income and giving you money when you can't work, you would usually cover whoever helps pay the bills. First, make sure the main source of income is covered. If this income stopped coming in, you would want to make sure your family's needs are met.
Don't stop there, though. What would you do if your spouse takes care of the kids full-time and something happened to them? That extra cost could be paid for by insurance. So, if a person relies on a second source of income, like a job or an unpaid contribution, to pay for their bills, they should also have an insurance policy.
Do you need to get your kids life insurance? Usually, this is only recommended if you can't pay for the funeral costs, which are usually around $5,000. If not, there's no reason for children to be insured since they don't make money for the family.
Having life insurance not only gives you peace of mind that your family will be taken care of after you or your spouse dies, but it may also be one of the best financial decisions your family can make.
