Life insurance can be a big purchase and a stressful decision. You will really have to weigh the different possibilities carefully before you commit to a particular insurance package.
It pays to spend a lot of time analyzing your needs and researching all of your options, because you may not get a second chance at selecting your policy; it is your family members that will deal with the consequences of your choices.
One thing to remember when considering whether or not to buy a life insurance policy is that you may not need one. If you have no costs to cover upon your death, or have the money for someone to use to pay for your funeral expenses, and you have no one who depends upon your income for support, it may be that you don’t even need a policy.
Keep in mind that just because you have no dependents it doesn’t mean that you don’t need some sort of coverage for when you die. If you do not have the money saved to cover your burial expenses, but you don’t see the need for a full life insurance policy, you can purchase funeral insurance instead.
Purchasing your funeral plot in advance of your death will help your family save money once you’re gone. Unfortunately, spur-of-the-moment plot purchases may bring out the unscrupulous nature of some in the funeral industry (as is the case with most price gouging), and a plot after death can cost a lot more than a plot purchased well in advance.
The cost of funerals can be very expensive, and your loved ones do not need the added stress of trying to figure out how to pay for your burial! So even if you don’t have people who are depending on your income for support, you should consider this option.
Life insurance can help ease the burden to your family by helping with funeral and burial expenses, and also pay your family an amount that you designate. For a relatively low monthly cost, your family can be covered $100,000, $250,000, $500,000, or another amount that is right for you.
You will have to know how much money your family will need in the event of your death. So consider the amount of your debt, burial costs, and how much you want to leave behind for your family. If you have a significant amount of money saved or a lot of assets, you should consider that in your calculations as well.
If you are young, you may be able to purchase a small life insurance policy to cover the costs of funeral and burial expenses for just a few dollars per month. In any event, you may be able to provide your family with peace of mind at a low cost, so it pays to go out and get a few quotes.
When considering life insurance, think about how your needs will change over time. For example, if you do not have children your life insurance needs will be quite different ten years and five children from now.
Keep in mind that life insurance only pays out in tragic situations. Take the time to make a wise decision before jumping on the first policy that you see (especially if there is a washed up actor trying to sell it to you).
photo credit: Robert Kimberly