Why is life insurance important?


Life is full of surprises, and we want to be prepared when it throws us a curveball. Life insurance is one important tool that will help us prepare for the unexpected, especially one that will have a significant financial impact, such as the loss of the breadwinner of the family or the death of a key business executive.

Here are some reasons why life insurance is important.

  1. Bills and mortgage payments. One important purpose of life insurance is that it provides the survivors with the money to pay off bills and mortgages in the event of the death of the insured person. This is particularly important if the insured dies of a critical illness and might leave the family with a lot of medical bills and burial expenses.
  2. Peace of mind. Life insurance provides you with peace of mind, knowing that, with your loss, your family can have the money that they need for their daily needs such as groceries, utilities, car payments and other key expenses. It is also one way of ensuring that you can send your kids to college and that they maintain the same lifestyle (go to the same school, live in the same house), even when you are not there. You don't have to worry about your family paying for funeral expenses out of pocket, particularly if the family is not prepared for this kind of expense.
  3. One form of "savings". Life insurance can be used to ensure that your estate has a substantial legacy that you can pass on to your heirs.

Even when you think you are healthy and will need insurance later in the future, it is helpful to already have coverage. For one, the premiums will be small and if you get health problems in the future, you already have life insurance coverage and don't run the risk of being rejected for coverage.

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