MoneyLife

Why Do You Need Life Insurance?

By Alison Kimberly
Why Do You Need Life Insurance

Most people want to make sure their family is always taken care of, and life insurance is one way to do that. You’ve heard of million dollar lottery winners, but have you heard of million dollar life insurance payouts? 

Life insurance doesn’t require entering a lottery. It is a guaranteed payment that will be released to your family if the worst happens and you pass away. Life insurance creates a financial safety net, removing the financial burden that the loss of a family member creates and leaving a legacy of care to your family. 

If you’ve been avoiding life insurance because you think you don’t need it or it seems too expensive, read on to learn why it is actually one of the most important expenses if you want to protect your family in the future. 

Is life insurance worth getting?

Why do you need life insurance? The top answer is that it will replace your income and ease the burden—both financially and emotionally—for your loved ones. Life insurance payments can be either a lump sum or regular payments, so you can find ways to make it affordable. Plus, it will protect your loved ones when you die. In the worst-case scenario, you know they will be taken care of with the financial safety net life insurance provides. 

Life insurance becomes especially important if you have young children or dependents of any age, as well as if you support your spouse financially or there is a mortgage on your house that you pay each month. These are just some of the many reasons to get life insurance!  

Nearly half of all Americans don’t have life insurance. Of those surveyed, the number one reason for not having life insurance was a financial concern that it is too costly. But this is exactly why life insurance is important! Here are 7 powerful reasons why you need life insurance.

7 Powerful Reasons Why You Need Life Insurance

Life insurance can provide on-going financial support for your family. It can also cover funeral costs of the deceased. Beyond that, think of all the financial support your family will need. Insurance can cover a mortgage, medical and dental bills, college education, childcare, loss of income from spousal death, debt, taxes, and inheritance. 

The cost of life insurance varies based on the individual’s age, healthiness, the dollar value of the policy, and the policy term. 

  • A healthy 35-year old man will pay as little as $17 per month for a $500,000 policy with a 10-year term.
  • A healthy 45-year old female will pay about $118 per month for a $1 million policy with a  30-year term. 

How much insurance is required and the length of the policy will vary because these factors are affected by the number of dependents, monthly income, mortgage, and other financial goals or future financial requirements, like future college costs. It’s a good idea to calculate your life insurance needs to decide which policy is best for you! 

There are both life-long life insurance policies and term policies ranging from five to thirty years or more. As long as you keep paying the insurance throughout the duration of the term, the policy remains valid. 

Here are the main reasons to consider life insurance as an essential element of long-term financial planning:

1. Create a financial safety net

A financial safety net means that your family’s finances will be secure if anything happens to you, which is tremendously beneficial to their peace of mind. The best financial planning ensures that even in the worst-case scenario your family will be taken care of. This includes paying off a house, providing for children, planning for college education, and covering regular income lost.

2. Leave an inheritance

In addition to the financial safety net, life insurance provides the opportunity to leave an inheritance to your family, friends, and loved ones. This inheritance could help your children with future weddings, house down payments, or to start businesses or careers later in life. 

3. Pay off your debts

Credit card debt, loans, home refinancing, and other loans can all create undue financial burdens following the passing of a family member. While we recommend managing your money and avoiding debt, there are some debts that are unavoidable. Life insurance makes sure that in the event of your unexpected death, your family will be able to pay off your debts with life insurance.

4. Peace of mind

There are so many unknowns and an enormous emotional cost following the loss of a loved one. While the emotional burden can only be managed with time, the financial burden can be planned for and taken care of ahead of time. Life insurance gives peace of mind to your family because they know that they will be alright financially. 

They will have the resources to pay for the funeral, counseling, therapy, a move, or anything else that they need during their grieving process. Ease the burdens by setting your family up with a life insurance policy and early financial planning. 

5. Leave a legacy

Life insurance can also be your opportunity to leave a legacy. In your will, you can write a note requiring that a portion of your life insurance money is donated to your favorite charity, used to construct a building in your name, or given away to a charity of your choice. You can also create a foundation that your heirs can manage as a way of continuing work that was important to you. 

6. Protect your business

The sudden death of an owner can spell disaster for small businesses. Life insurance can provide the capital that will allow the business to transition to new leadership. Those funds can be used for re-building or restructuring the business to generate a continued income stream for your family and loved ones. Life insurance can be the difference between success or failure for the business after a sudden death. 

7. Supplement your financial safety net

In addition to life insurance, it’s important to build your financial safety net during your lifetime through regular investment strategies that will support and protect both you and your loved ones. MoneyLion investment accounts are one of the best ways to create this financial safety net. Good financial planning is a life-long activity. It involves taking the steps to build wealth, invest money, and manage debts. MoneyLion can help you to build this life-long financial security

You can control your family’s financial future

Why do you need life insurance? Life insurance is a way to build perpetual financial security for your family, protect your business, leave a legacy, and more. 

Building good financial health and leveraging financial resources during your lifetime with a MoneyLion account will make financial planning easier. When you sign up for a RoarMoney account, you can get a head start on securing your financial future!

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