Do I Really Need Life Insurance?
“Do I really need Life Insurance?” is a question that I am often asked, especially by young people who have their youth and good health on their side. So why “waste” money buying Life Insurance now?
Nobody seems to question the authorities when they mandate that you buy auto insurance if you own and drive a car on public streets. Nobody questions the bank or mortgage lenders, who mandate that you purchase homeowners insurance, fire insurance, earthquake insurance, flood insurance, and tornado insurance. All of these insurance policies are required based on locations where certain risk groups are more prominent.
Do we buy those policies because we expect to one day be in a car accident or that our car would one day get stolen, or even worse, be involved in a fatal traffic accident? Do we buy homeowners insurance because we expect that our house will burn to the ground one day?
No, we buy those policies because it is the law, and nobody will lend you money to acquire cars or real estate without securing their debt. And, of course, we want to protect our assets.
Meet Mrs. and Mr. Smith: This young family is just starting out as a newlywed couple, and after having their first child, bills are stacking up quickly. They have to juggle living expenses, transportation, food, diapers, and everything that comes with adult living. Every dollar is already spent halfway through the month, an actual juggling act to make ends meet. Every month they have to evaluate where their money is being spent. However, a few things are NOT up for debate, such as their Cable TV, movie night babysitter, and Starbucks! Those items rank up there with oxygen! Without those simple pleasures, life is barely worth living, right?
Should the Smiths buy life insurance?
The truth is that less than 2% of all Term Life Insurance policies ever get paid out. That sounds like a very insignificant number. However, let’s keep that number in mind: If you had a 2% chance of crashing on your next air travel, would you even consider boarding that flight?
The Insurance companies have these statistics incorporated into their pricing on the overall cost of a simple term policy. It is called “Mortality Credits,” and other factors that influence pricing are health and age.
The truth is that most young people can own a $500,000 Term Life Insurance policy for the weekly price of a cup of Starbucks coffee. It is a very small sacrifice, considering the absolute financial devastation an early departure of either person in the Smith family household would have on the surviving spouse and child.
Taking into consideration all of the above, the importance of any form of life insurance is evident. It’s a MUST have, especially for a young couple with a child. It is the ultimate form of love you can give to each other. Life is full of uncertainties. Protecting your loved ones does not have to be one of them. Show them you care by taking action today! It shows that you care about your family and that your family will be protected and taken care of long after you are gone.