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Who Needs Life Insurance?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 30 March 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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When it comes to preparing for the financial welfare of loved ones, life insurance is an excellent option. Unfortunately, there are people who feel that life insurance is not of any worth, given their individual circumstances. Here are some examples of how life insurance can add an element of financial stability to just about every situation.

The purpose of insurance in general is to provide some sort of relief from financial burdens in the event of a major life change that impacts the individual or a group of individuals. With life insurance, that focus is on making sure that any final expenses associated with the deceased are settled quickly, without dipping into other financial resources.

One of the more common misconceptions among young people is that life insurance is for old people who are more likely to die a natural death in a few years. The reasoning is that there is plenty of time to secure life insurance later in life. Unfortunately, that is not always the case. Diseases, accidents and other situations can occur that end life, with no regard for age. Young adults benefit from taking out life insurance early on, so that even if there is not yet a family to support, there are funds available to help with any final medical expenses, as well as burial costs and settling any outstanding debts.

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Another reason people need life insurance is for general care of a loved one when one partner is no longer alive. It is not unusual for the remaining spouse to live for a number of years after their partner is deceased. Life insurance can be a way of continuing support and nurture to the remaining partner, making the financial burdens of living alone a little easier to bear.

Even persons who have never had families should consider taking out some life insurance coverage. Life insurance beneficiaries do not have to be blood relatives. A beneficiary can be a trusted friend or even a charity or religious organization. Taking out life insurance and naming a beneficiary can be a way to let someone special know how much he or she meant to you during life, as well as provide some support in the continued function of an organization that was close to your heart.

Certain types of life insurance policies carry a cash value. This provides you with a valuable asset that can be used as collateral on loans, or even as a means of borrowing against the value of the policy if necessary. During periods when the financial outlook is not pleasant, having cash value in a life insurance policy may be just what you need to make it through a rough period.

From a practical point of view, life insurance is one way to ensure that all final expenses connected with burial or cremation are handled. Death benefits provided by government support in most countries are nowhere near enough to cover the cost of a basic funeral or even a cremation. Life insurance funds can be used by the executor of your estate to ensure that your final wishes are carried out, and that your remains are handled with dignity and respect.

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