Why you should never put off buying life insurance
April 05, 2018
If you are like most people, you understand the importance of life insurance. Yet, it's the easiest thing to postpone. The main reason is the belief that putting it off by a couple of months is not a big deal. After all, if you are in your twenties or thirties, the chances of dying in the next few months are remote. This delay can go on and you may end up living without adequate insurance for many years. A small delay rarely results in a disaster, but life can sometimes take the unexpected nasty turn.
The need for life insurance
It usually takes most of your working years to save enough to ensure a good quality of life for your family. If your family depends on your income, it's critical for meeting expenses and life goals. Adequate insurance is the only way of ensuring that those goals are met. Here are some reasons why you may want life insurance.
1. To provide for regular expenses | Even after your death, your family has to pay mortgages, educational expenses and other bills. Without insurance, your dependents could end up in debt or worse. Life insurance will provide a lump-sum payment and possibly income replacement for your family to meet their expenses.
2. To meet additional expenses | Money is not the only way a person contributes to a family. Even if you are not working, your death could mean extra expenses like housekeeping and daycare for your children. Life insurance can help your family meet those extra costs.
3. To leave some inheritance for your loved ones | If you don't have any significant assets, a whole-life policy will ensure some inheritance for your loved ones. Even if you have plenty of wealth, life insurance can help your family meet inheritance-related expenses and taxes.
4. To restore the family's finances | If you die after a prolonged illness, your family will end up spending a lot of money for your treatment. If that makes a big dent in the family savings, life insurance will help restore it.
What makes people put off buying life insurance
If life insurance is so important, why do people delay buying insurance? If you don't have enough life insurance, it's probably due to one of these reasons.
1. The mistaken belief that there is no urgency. This will keep life insurance close to the bottom of your to-do lists. If this is the case, it's time to act fast.
2. You are not comfortable thinking about your death and its impact on your loved ones. This is true for everyone, but not thinking about that possibility will not make you forget about it. Getting adequate insurance will give you more security and peace of mind.
3. You don't know how much insurance you need.
4. You don't know what insurance products are available or which ones to buy.
5. You can't afford the premium to buy adequate coverage. In this case, it's better to start with a policy that you can afford because partial insurance is better than no insurance. You can buy more life insurance later or replace it with a better policy when your income increases.
Why putting off life insurance can be disastrous
The financial crisis that can result from a family member's untimely death is not the only reason for buying life insurance on time.
Premiums are generally lower when you buy insurance at a younger age. If you wait, you will end up paying more. You may also need to go through additional formalities like a detailed medical examination.
Insurability of a person is not always guaranteed. A serious injury or critical illness can make it very difficult for you to get life insurance. Even when you get one, it will usually be expensive. The insurance company may also impose extra conditions or exclusions.
The loss of a family member is hard-hitting. That can become far worse if you leave behind a financial mess for your family. The earlier you buy life insurance, the better. You can live in peace knowing that your family will have enough in the bank should the worst happen. Money can never replace their loss, but at least your loved ones will be financially secure after your death.