Life insurance is a topic that many people prefer to avoid, however, if those people have people in their life who depend on them for financial support, then life insurance is necessary in order to protect those people in the unfortunate event that something happens to them. Life insurance is essential to a smooth financial plan, and there are a number of events that occur in life that may bring up the discussion. Whether you have graduated from college, you’re getting married, starting a family, purchasing a new home; all of these are common events that occur in life that could be a reason to start thinking about the important decision of purchasing life insurance.

Like other types of insurance, life insurance is all about providing you and your family with extensive protection for your financial security and well-being. Many people often overlook the importance of insuring themselves. They see it as an unnecessary, overly-complex, and oftentimes expensive purchase or they feel as if they don’t yet need it in their life path. However, often times, the purchase of life insurance is simpler and less expensive than what most people believe. Life insurance is helpful in that it assists with avoiding financial pains for the people who matter most in your life in the event that you pass.

Still not concerned that you need to get life insurance? Check out some essential reasons why you should!

What is life insurance?

Before going over various reasons why purchasing life insurance is important, we found it best to quickly review what exactly life insurance is. To put it in a simple way, life insurance provides financial well-being and security for your family at your time of death. Life insurance can cover the pricey expenses related to funerals, outstanding debts, and it can replace your incomes so that you can continue to provide for your family, even after you have passed. And, in some cases, life insurance can even cover the costs of long-term care before you pass on. Let’s dig deeper into the reasons why you need life insurance.

Reason #1: It can help your family

If you are the households primary income-generator, it’s no secret that the loss of your income would impact your loved ones. Do you have enough money saved to pay for college tuition? And, don’t forget about paying off the mortgage, too. If you are like most people, chances are the loss of your income could really affect your family. In addition, many people don’t consider the importance of covering their household’s non-primary income earner as well. If they were no longer there, would you have enough money to cover the expenses of childcare, or the additional funds to provide them with clothing, groceries, etc.? The loss of a family member is never easy and things will never be the same, however, many life insurance plans will replace your income after you pass, enabling your family to live as comfortably like they are used to. Life insurance will help your family with financial peace and stability when you have passed, helping them go back to as much of their normal life as possible.

Reason #2: It can cover debt and expenses

As mentioned, life insurance can be used for outstanding debts and expenses. It is estimated that the average American has a credit card debt over $5,000. Not to mention, the average costs for funerals can range from $7,000-$10,000. In the event that you pass, the responsibilities of any debts and expenses will be put on your loved ones. In order to provide your loved ones with financial security after your passing, life insurance is essential. Many life insurance policies will allow your loved ones to cover any debt, bills, or expenses in your name, like credit card debt or funeral expenses.

Reason #3: It can protect your business

Life insurance can be very beneficial for business owners. If you have a sole proprietorship or partnership business, your passing could cause a questionable future for it. While life insurance is not going to help your family or business partner with a solution for difficult challenges and issues or provide them with the next great business idea, it can assist with covering the additional expenses that the surviving owners or new owner would undoubtedly need in order to keep the business and its legacy on track after you pass. If you have a business partnership, it is crucial to ensure that you both have life insurance policies for maximum protection.   

Reason #4: The sooner the cheaper

Generally, most life insurance policies get more expensive the older you get. Getting a plan while you are younger, say in your 30s, and healthy will likely have lover life insurance premiums than compared to someone who is in their late 60s with multiple health complications. Because it is generally more beneficial, we recommend getting life insurance sooner rather than later so that you are better enabled to provide your family with more coverage and financial security while paying much lower premiums.

Reason #5: You may need emergency funds

Some life insurance policies can also serve as a source of emergency funding. If you ever find yourself in financial distress, you essentially can borrow from the cash value of your life insurance policy. Although this will often time reduce the available benefits, emergencies happen and this is often a short-term solution for emergency funds when you need them.

Reason #6: It can supplement your retirement savings

Many people set up a 401(k) or a Roth IRA account, but what they often don’t realize is that their life insurance policy can be used to save for retirement as well. With a whole life insurance policy, you can build up its cash value over time, which can be used whenever needed. The cash values of life insurance plans are a great way to diversify your investments and save for life after leaving the workforce.

There are plenty of other valid reasons to purchase a life insurance policy, in addition to the six listed above. The most important thing when deciding whether or not to purchase life insurance is taking the time to do enough research. When the time comes, your loved ones will be grateful that you took the time to plan.

If you are thinking about purchasing Life Insurance in Calabasas, or in the surrounding areas, let the team at Kennedy Wealth Management help. We can assist you with finding the best life insurance policy for you and your loved ones. Our professional agents are ready to help by looking at your assets, your families potential needs after your passing, and guiding you in making the best decision about the best way to provide for them after you’re gone. To learn more, or to receive a free life insurance quote contact the friendly and caring team at Kennedy Wealth Management.