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Life insurance is one purchase that you make in the hopes of never needing it. However, some people refuse to purchase life insurance for one primary reason: they believe it isn’t worth the money to pay for something they will ideally never use.
However, that line of reasoning is incorrect since, while we all hope never to need life insurance, the truth is that you can never tell when disaster will strike. Without a plan in place, you could leave your loved ones in a situation where they can’t afford to live independently.
According to a recent ConsumerAffairs poll, 29% of respondents believe purchasing a life insurance policy isn’t worth the money. But here are several reasons why you should consider getting insurance.
If You Have Dependents
Let’s say you’re offered $100 monthly in premiums for a 30-year term life insurance policy covering $500,000 in coverage. That’s $1,200 a year you could be spending on the insurance coverage you’ll hopefully never have to use.
You may believe that it’s best to save that $1,200 instead of paying it yearly as a premium. However, saving $100 every month for 30 years will get you $36,000. And if you died at that time, your loved dependents would have had a lot less than $500,000.
That also implies that you’ll be alive for the next 30 years to save that money.
The entire point of life insurance is to safeguard your loved ones against the unforeseeable. Under the same assumptions, if you died in five years, your family would have $6,000 in savings left behind. This may not even cover the expense of a burial.
Even if it appears to be an unnecessary expense, you should purchase life insurance. If you ever end up needing it, it may more than pay for itself.
How to Save Money on Life Insurance
Some individuals believe that whole life insurance isn’t worth the money, which may be true in some cases (although several benefits come with whole life insurance).
Whole life insurance offers protection for the rest of your life. It also builds up a monetary value over time. However, it can be more expensive than a term life insurance policy, which only offers coverage for a specified time (typically, 20 to 30 years).
Whole life insurance can be unreasonably expensive, to the point that many policyholders are forced to cancel or surrender their coverage owing to a lack of financial resources. Your loved ones will be unprotected if you cancel your policy.
Because term life insurance is cheaper, there’s a good chance that you can afford to pay the premiums each year to make sure that your family has the protection they need if you die.
The last thing anyone wants is to put their dependents in a financial situation where they can’t support themselves. Buying a life insurance policy is an excellent way to protect yourself from such a situation.