This article was sponsored by SelectQuote, but all thoughts and opinions are my own.

Let’s face it, life insurance can seem like a dirty term. Images of smarmy salesman may come to mind, or you might just think that it’s a totally unnecessary expense.

The reality, though? Life insurance can be one of the best investments you make for you and your family.

No one wants to spend their time thinking about what would happen if they died, but if you have family that depends on you for their livelihood, it’s worth some consideration.

Imagine a scenario where your loved ones are dealing not only with the loss of you, but also with the financial implications of your death. No one wants their family to go through something like that, but with the right life insurance policy, the transition can happen with a lot less financial worry.

What is life insurance?

Life insurance is a type of protection, that allows you to ensure you and your loved ones are covered in life if a tragedy should take place. There are different types of life insurance, but one of the most affordable life insurance options is term life insurance.

According to SelectQuote, “Term life insurance provides coverage for a specific period of time. You can generally buy term life insurance for periods of five years or more, and your policy is active until that period passes. Because you only pay for it as long as you need it, term life insurance is considerably more affordable than whole or permanent life insurance.”

Through term life insurance, you buy a policy for a certain amount of time — let’s say twenty years or so. You choose your policy amount and pay a monthly or annual premium. Should anything happen to you during that “term”, your beneficiaries will receive financial help in order to pay for any final expenses such as funeral costs, debt, and more. A life insurance policy can also help recoup the loss of income from a primary breadwinner or income earner.

Should you get life insurance if you’re in debt?

When you’re paying off debt, it can seem like you should forego every last expense in order to pay it off as quickly as possible. But depending on your situation, term life insurance may be just what you need, especially if you’re in debt.

Why? Because the debt you carry may be passed on to your spouse or family should something happen to you. Of course, some debt like federal student loans have a death discharge, but not all debt does.

Some private lenders will not offer a death discharge for student loans. If you have a co-signer on the loan, the balance could transfer to them. While many of the larger private student loan lenders do offer a death discharge on loans, it’s important to know if your lender does. Credit card debt and other types of debt may be passed on to your estate.

So if you’re in debt,  term life insurance can be a very good safeguard to ensure no one else is burdened by your debt. You can purchase a policy for the amount of time to be insured to match the amount of time you estimate it will take to finish paying your debt.

Leaving on a good note

Even without debt, having the assurance that your family can pay for funeral expenses and take care of any lingering financial matters can provide the ultimate peace of mind for some people. 

Not only that, but life insurance can also be seen as a way to take care of the next generation and leave a positive legacy. For example, if you have a family, you can leave behind the gift of financial security. After all, responsibility doesn’t end after death.

You can get a policy that will help your family pay off the rest of their debt or ensure your kids can go to college without taking on their own debt.

If you are single, your term life insurance payout can help your family pay for your final expenses and ensure that everything is taken care of.

Getting life insurance 

While life insurance may seem like it’s only for certain populations, nearly anyone can benefit from it. Nobody likes to think of their death and the costs associated with it — which could be several thousand dollars, but the fact of the matter is that we’re all headed toward the same destination. These are things we all need to plan for sooner or later.

A term life insurance policy can be a generous sum of money that provides peace of mind for everyone. One common misconception is that life insurance is expensive, but that’s actually not true. If you’re young and healthy, your life insurance policy could be under a dollar a day!

To get started, you can get a quote for a life insurance policy from SelectQuote. SelectQuote has been around for 30 years. They have the expertise to find you the best policy for you, at the best price. Aside from life insurance, they also offer home and auto insurance as well.

Life insurance may not be a fun or sexy topic to talk about — but it can be one of the safest and smartest tools to protect you and  your finances.

 

Melanie

Melanie is a freelance writer currently living in Portland, Oregon. She is passionate about education, financial literacy, and empowering people to take control of their finances. She writes about breaking up with debt, freelancing, and side hustle adventures at DearDebt.com.

Currently she puts more than 50% of her income towards debt, while living a frugal, fun life. In addition to her love of personal finance, art and music, she is also a karaoke master. Follow the adventure @DearDebtBlog.

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5 responses to “Do You Really Need Life Insurance?”

  1. NZ Muse says:

    I just got LI this year when I bought my house. Funerals can be expensive (though it’s the mortgage I worry about)! Will revisit when kids are on the horizon.
    NZ Muse recently posted…Link love (the democratic edition)My Profile

  2. CaseyR says:

    I finally got around to buying life insurance when I was 32. I wish I’d gotten it in my 20s – it likely would have been even cheaper! And, even though I’m healthy, the application would have been MUCH simpler to complete. I encourage every younger friend I have to sign up for a combination of whole life and term life insurance!

  3. I have life insurance through work. It does the job for me now but if I ever need additional life insurance I’ll be sure to revisit these decisions in the future.
    Mustard Seed Money recently posted…Work for Two Million Dollars or Retire Early?My Profile

  4. Centsai says:

    Having life insurance is extremely important, not just for you, but also for your loved ones! Death already comes with mourning your loved one, so you should make it easier on yourself and your family and not have to have as much of a burden with all the financial responsibilities that death comes with!
    Centsai recently posted…Will Public Service Loan Forgiveness (PSLF) Be Eliminated?My Profile

  5. Most single people don’t need life insurance because no one depends on them financially. But there are exceptions. For instance, some single people provide financial support for aging parents or a sibling with special needs. Others may be carrying significant debt that they wouldn’t want to pass on to family members who survive them. Insurability is another reason to consider life insurance when you’re single. If you’re young, healthy, and have a good family health history, your insurability is at its peak and you’ll be rewarded with the best rates on life insurance.
    Sagar Nandwani recently posted…5 Reasons Why Bullion is Ideal for Your Retirement FundMy Profile

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