Are you having trouble deciding whether to have life insurance or not? In this article, we’ll look at the common question “is life insurance worth it”?
To Buy Life Insurance or Not
You’re here because you’re not sure whether it’s necessary to invest in a life insurance policy. Or would it just be a waste of money that you could have spent on something else?
Perhaps you feel confident that when you pass away, your family will be able to support themselves on their own. Or maybe you are worried that, after your passing, they’re going to have a tough time financially. In which case, you might want to make sure they have some money coming their way.
Is Life Insurance Worth It?
So let’s unpack this a little bit. We’re going to provide you with some info to help you decide whether it’s worth buying life insurance or not.
The bottom line is it really depends on your situation. There is no right or wrong answer that applies to everyone and every situation.
But big picture, the general consensus is that life insurance is worth it if you want to provide financial support for your family after you pass away.
But let’s dig a little deeper and go over the facts to help you decide whether it is worth it or not.
What Is Life Insurance?
First off, what is life insurance? And what are the different types of life insurance?
Basically life insurance is a policy you buy that will pay out a death benefit to your heirs when you pass away.
This financial support can help pay off any bills or debts that your loved ones have. Or, they can save it, invest it or spend it on whatever they’d like. People who receive the death benefit from your policy after your passing are known as dependents.
There are a few different types of life insurance policies. You can learn about the types of life insurance here. But here are a two main categories to understand.
Term Life Insurance
Term life insurance is set to cover you for a set term. Meaning it has an expiration date. Let’s say you bought a 30-year term life policy, you will only be insured for that period of time.
If you pass away within that 30 year time frame, your dependents will get a death benefit. If you live longer than 30 years, they won’t.
Permanent Life Insurance
Unlike the previous type of life insurance, a permanent life insurance policy will keep you covered as long as you keep paying your premiums. Some types of permanent life insurance policies allow policyholders (that is you if you are investing in a life insurance policy) to accumulate a cash value.
Bottom Line
So is it worth it to invest in a life insurance policy? Again, the answer to that depends on your situation.
If you have a family, loved ones, or any dependents, then it may be necessary to have a life insurance policy. This is especially true if your family or loved ones are still relying on your income.
This is also more important if you or your family has a debt to pay off. Life insurance benefits can be used to pay that debt in case you unexpectedly pass away. Your dependents can also use that money as savings if you unexpectedly pass away.
On the other hand, if you do not have any dependents or your dependents are well off financially, having a life insurance policy may not be worth it.
