When Do You Need Life Insurance? 5 Times That It Is Crucial

You have probably heard many myths about life insurance. Perhaps some of your friends told you it’s only for “old people.” Or that if you’re single and with no one depending on you, you don’t need one.

And the funniest myth of the lot: life insurance is only to bury the dead – LOL. Really?

Well, we are here to tell you all that hogwash has no element of truth. Life insurance is not only for seniors. Neither is it only for the wealthy and married people with extended families. It is for everyone!

So, if you have not considered life insurance yet, it is high time you did so. And in this article, we’ll share five circumstances where it’s crucial to have life insurance.

But before we delve into the details, let’s help you understand the “biggest” confusion of all: life insurance and life assurance.


Life Insurance Vs. Life Assurance: What Is The Difference?

Though life insurance and life assurance are used interchangeably, they are slightly different. Not all forms of the former capture the essence of the latter. Here is what we mean by that:

Life insurance has different types. But of all the variations, only “whole life insurance” comes close to the concept of life assurance: the two policies will last the policyholder for their lifetime without renewing terms. As a result, we can’t generalize all forms of life insurance as life assurance.

Now, we have settled the confusion. Let’s discuss the crucial times when life insurance is a necessity.


5 Circumstances When You Need Life Insurance

Saving Your Livelihood And Business

Regardless of how you started your business, you’d eventually open it up for partnership when the booms arrive. And say you won’t partner with others, how about employees? You possibly can’t achieve all your ideas without some workforce!

So, what happens if one of your business personnel suffers a critical illness or death? We are sure you don’t want to find out. In such a case, you need life insurance.

With life insurance returns, you can sustain your business, hire a new employee or partner, and even support the deceased’s family.


Assisting Your Retirement Income

We understand that you’re not lazy; you work hard every day and save for retirement. But often, the savings aren’t just enough. Emergencies will happen, and even beyond that, how about inflation?

Stock prices might crash, and the value of your retirement savings will go down with it. In essence, your retirement income needs help. Fortunately, life insurance can help. How?

Some life insurance policies can augment your retirement savings. However, you might want to discuss that with your insurance company first.


A Short Gap For When Your Breadwinner Dies

While it is true that no one lives in fear of death, it will happen to everyone. But what if it happens sooner than expected? What if it happens to the chief provider of your household income? How would you survive?

Life insurance is how you can survive; it can help you steady your finances until you get things in order. How?

For example, joint life insurance can help a widow or an orphan in the case of death. Whichever the case may be, the policies will pay the dependent. With that, you’d sustain yourself till you can fully stand on your feet.


The Appropriate Plan To Protect Your Family

You can’t always be dependent on people. With time, you’d grow and have a family of your own – people that depend on you. When this time comes, you also need to prepare ahead. Make plans for your kids and save them from debts. That way, they can enjoy financial freedom.

So, where does life insurance feature in all of that?

  1. Life insurance can offset your kids’ tuition after you are gone.
  2. The policy can offset your debts so that your kids don’t inherit them.
  3. Life insurance can help you prepare a sizable inheritance for people that depend on you.
  4. Most importantly, life insurance can help cover the cost of your funeral. And because funerals are such capital-intensive events, you’d be relieving your kids and families of undue stress.


Protecting Your Properties

Earlier, we mentioned how life insurance could help you leave an inheritance for those that depended on you. However, that won’t be possible if you have a mortgage on your properties.

Take your home as an example; if you took out a long-term mortgage on it, and you, unfortunately, got terminally ill, what happens?

Good news – life insurance can still help. It can offset your mortgage and ensure that your family has protection after you are gone.

In summary, life insurance is much more than leaving behind an inheritance or paying off debts. It is necessary planning that you need for your future. As much as you plan your meals, this policy is equally essential!

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