It’s easy to be overwhelmed when shopping for life insurance. With the varying costs, types of policies and potential medical exam, you may be asking yourself, is life insurance really worth the time and cost? Here we explain the invaluable peace of mind that comes with purchasing a life insurance policy and why it just might be worth it for you.
Types of Life Insurance
The two most common types of life insurance are term life insurance and permanent life insurance.
Term Life Insurance
Term life insurance is one of the most affordable and straightforward types of life insurance. Like its name, you have the option to choose the “term” or length of coverage so you only buy a term policy for as long as you need it. The typical term lengths are 10-year, 15-year, 20-year, 25-year and 30-year policies.
The cost of term life insurance is determined by a number of factors, including your age, amount of coverage, health and lifestyle, but since you only pay for it as long as you need it, term life insurance is typically more affordable than other types of life insurance.
Permanent Life Insurance
Permanent life insurance includes several types of life insurance without a preset expiration date, such as whole life insurance and universal life insurance.
Whole Life Insurance
Whole life insurance provides a set amount of coverage for your whole life as long as you keep paying the premiums. In addition to providing a death benefit, it can also include a savings component known as the cash value.
Universal Life Insurance
Universal life insurance gives you coverage for the rest of your life, with the value accruing and earning interest as you pay your monthly premiums, leading to the opportunity to also act as a savings account.
When You Should Buy Life Insurance
When it comes to purchasing life insurance, sooner is always better than later. Here are a few specific instances, however, that might have you considering life insurance.
When You Get Married
While you may think you don’t need life insurance until you have kids, you’ll want to consider if your spouse’s income would be enough to pay off any debts, float the mortgage or cover rent and utilities if you were to pass away.
When You Have Kids
A life insurance policy gives your family the financial support they need to continue living life if the worst were to happen. It can help your loved ones pay for important expenses such as college tuition, utilities and the daily cost of living, and even if you are a stay-at-home parent, a policy can help cover childcare expenses.
When You Need to Replace Your Income
If anyone depends on your income or financial support, a life insurance policy financially protects your family in the case of your death, and the loss of your income.
When You Want Peace of Mind
One of the easiest ways to gain peace of mind and protect your loved ones is by having the right life insurance coverage for your needs. It’s not always the easiest thing to think about, but being prepared for the worst can help you feel sure that your loved ones will be taken care of.
When You Have A Mortgage
A life insurance policy can help cover mortgage payments so your loved ones don’t have to move if something were to happen to you.
How much life insurance do you need?
How much life insurance you need depends on a variety of factors, including your long-term financial obligations, those who are dependent on your income, the cost of final expenses and more. Many people find that 10-12 times their income is enough coverage, but our life insurance calculator can help you determine how much coverage might be right for you and your family.
Who doesn’t need life insurance?
For most, a monthly payment is a small price to pay in order to ensure your loved ones are taken care of in your absence. However, depending on your financial situation, it may not always make sense to have a life insurance policy.
Those Who Don’t Have Dependents
If you’re single with no dependents, you probably don’t need life insurance right now. However, you may eventually have dependents and therefore will need a life insurance policy. When it comes to buying life insurance, however, sooner is always better than later. Buying life insurance while you’re young and healthy can help lock in lower rates, helping you save money when you actually need the coverage.
Those Under 18 Years Old
Those under 18 years old in most cases do not need life insurance as they don’t have many financial obligations. An unusual exception to this would be in the case of a child who supports their family, like a child actor. Otherwise, there is usually no need for those under 18 years old to have a life insurance policy.
Bottom Line: Is life insurance worth it for you?
When considering the varying costs, types of life insurance and a potential medical exam, it’s common to wonder if life insurance is worth it. While it’s not the easiest thing to think about, a life insurance policy provides invaluable peace of mind and is the best way to financially protect your loved ones.
Learn If You Should Buy Life Insurance Today: SelectQuote Can Help
SelectQuote can help you find the right coverage with the right carrier at the right price in just minutes. Not only have we been helping individuals and families shop for insurance for more than 35 years, but some of the life insurance companies we work with are among the most trusted in the U.S.