I often find the misconception among unmarried people and those without children that they do not need life insurance. That could not be further from the truth. With the policies available these days, life insurance is about much more than simply providing a death benefit for those you leave behind. Here are some of the reasons why I believe everyone, young or old, married or single, should have life insurance.
Unfortunately, I have had to bury both my parents. I can tell you firsthand that regardless of the type of ceremony you choose, a funeral is expensive. The added stress of finding the money to pay for a funeral after losing someone you love makes the situation even more tragic. If you are single, do your parents, significant other or siblings have the financial resources to pay for your funeral? I know people who have had to establish a GoFundMe to pay for burial expenses. Others, due to financial constraints, had to bury their loved ones in what is really a cardboard box. How would your loved ones pay for your funeral?
Do you have any debt, student loans, credit cards, auto loans or mortgages? Was the debt co-signed or guaranteed by another person? If so, that person will be required to pay the debt. Although some loans may be written off as bad debt should you die, debt doesn’t just go away. If the debt is not paid, then whatever was used to secure the loan will be foreclosed on or repossessed.
Life insurance is typically less costly than many people think, especially if you are young and healthy. By purchasing life insurance, you lock in the coverage now. No matter how your health circumstances change, the death benefit is there to provide financially when you are no longer alive to do so.
As I have mentioned often, certain forms of life insurance can accumulate cash in a tax-favored manner inside the policy. You can borrow from yourself if the need arises or use the funds to supplement your retirement income.
What happens if you get seriously ill later in life? With advances in modern medicine, people are surviving illnesses that only a few years ago were considered a death sentence. How do you continue to pay your everyday living expenses if you exhaust your savings or retirement funds to pay medical bills? Many life insurance policies offer to pay a portion of your death benefit while you are living to cover expenses incurred from things like chronic, critical or terminal illnesses. If you are single, knowing there would be money available to allow you the freedom to be able to choose to stay in your home and pay someone to care for you can bring peace of mind.
LEAVE A LEGACY
Effective January 1, 2020, The SECURE Act eliminated the “stretch IRA” for a non-spouse beneficiary. Life insurance can help overcome this issue. For pennies on the dollar, it may be possible to leave a financial legacy that could be generational. Perhaps you have no one to whom you would like to leave a financial legacy, but there is a cause you are passionate about. Are you aware you can name that cause as the beneficiary of a life insurance policy? What a great way to make a financial impact on something that matters to you, even after your death.
Do you have life insurance? If so, have you taken the time to review your coverage in the last year? If not, you should. If you don’t have life insurance, I believe you should strongly consider it.