Saving “for the rainy days” is an old adage that explains why many make it a habit to set aside little bits of cash for future needs, emergencies, and financial challenges that may happen. No one really knows what will happen next. We set aside money for events that we think might happen such as joblessness, sickness, accidents, earthquakes, natural disasters or calamities. Some people invest their savings in financial instruments such as time deposits, stock market equities, or in money markets so that their savings can grow.
One reason for all these savings and investments is for financial protection in the event that something bad happens to us while we are still alive but helpless. For instance, we want to secure our retirement when we are unable to earn money. By the time we retire, we want to have a large enough sum of money to maintain our living standards. We want to enjoy life more after we stop working.
Why do we need life insurance?
With that said, here are some reasons why you should get life insurance and the benefits that you can expect from it.
1. Financial Protection
One very obvious reason is financial protection. But for whom? This is what many people do not clearly see. We are not aware that we may be earning a decent income today and that part of this income may be used to support our elderly parents, our spouse or partner, our children, or even relatives and friends. When we die, we do not see exactly how the people we are supporting now will get their subsistence.
The primary purpose of getting life insurance is for the financial protection of our loved ones when we are gone. For the low-income bread earner of a family, once they are gone, their loved ones and their dependents will suddenly be financially troubled. Of course, they will grieve for the loss of their bread winner, but they will also stress out because of their loss of income for their basic needs.
Getting life insurance is to protect our loved ones from a sudden financial crisis. One question will arise when we decide to be insured: how much will be our insurance amount. You can visit SimpleLifeInsure.com for more information so that you can make a properly informed decision.
2. Insured Value
The guaranteed insured value will depend on how much you can afford to pay for the premium. The premium is a small percentage of the insured value that we have to pay annually. A high value will demand a higher premium.
There is no fixed rule on how to determine the insured value. However, the insured amount should, at least, ideally cover your funeral expenses. You can also ask your insurer to set your insured value as equivalent to your one-year income. Why a year? This can give the family and dependents a one-year minimum time-frame for them to adjust and find a livelihood to replace the support that the insurer was providing them. If the insurer can afford to pay for a higher premium, this will ease the financial burdens of dependents and there are no medical exam choices.
3. Investment
Getting life insurance can be considered as an investment. If you start getting life insurance in your twenties, the premium payment will be lower because the premium is dependent on the insurer’s age. The older the insurer is, the higher the premium payment. This is one very good reason for you to get life insurance while you are young.
There are different kinds of life insurance and there are different payment plans as well. Some life insurance may come with an investment policy. Others will ask you to pay only for a limited time, after which you are protected for life. Again, consider and get life insurance when you are young. Choose the option that gives you the best benefits for your own self and for your loved ones.
Conclusion
When young people feel positive, life is seen through rose-colored lenses. Not surprisingly, it is difficult to convince young people to get life insurance. Most young working adults would rather spend their money on food, clothes, or on entertainment. They would rather spend to enjoy life than to spend on life insurance. Some believe that their earnings and savings are more than enough insurance. Some believe that paying for life insurance now is another burden instead of seeing that they are protecting the future of those that they love at present.
