Life insurance: it’s one of those things no one really wants to think about.
According to a 2015 study by Life Happens, 43% of Americans admit they’d feel a financial impact if their breadwinner passed away, but 54% say they’re still unlikely to buy life insurance in the next year.
Despite many North Carolina residents misjudging its cost, term life insurance – which covers a policyholder for a specified period of time- is surprisingly affordable and remains the best way to protect your family.
While some may get away with not taking out life insurance, there are a few instances where term life insurance becomes absolutely necessary:
Before co-signing debt
Many students ask their parents to co-sign their student loans.
This means your parents are responsible for your debt should something happen to you.
Life Happens reports some banks even ask for debts to be paid in full after death, but life term insurance would be able to cover this and any other expenses should you pass away.
NerdWallet points out that the term can be timed to end once the debt has been paid off.
Whether you’re just married or just cohabitating, you’ll probably find your monthly expenses are based on your combined income.
Many young couples start their lives together with student debt or wedding debt. How would you repay that debt if something were to happen to one of you?
MoneySense reports that another good reason for insurance is to cover the income difference that would be lost if the highest earner were to pass away.
Buying a home
Mortgages are almost as big a commitment as marriage.
Buying a home is exciting, but again, how would your family handle the debt if something were to happen to you?
Term life insurance could be set up to cover your remaining house debt, making sure your family won’t have to move. Like with student debt, the term can be set to match the years on your mortgage.
Starting a family
Any parent will be able to attest: children are expensive.
Before you consider the price of nappies and book bags, you need to buy term life insurance so their guardian will be able to pay for those things if you can’t.
Moreover, stay-at-home parents have even more reason to seek cover. Your family will need to pay someone to help with your duties like childcare and transportation after you’re gone.
Before starting a business
Depending on the size of your business, you’d be putting the lives of your staff along with your family at risk after an untimely death.
NerdWallet points out that besides paying off business debt and estate taxes, term life insurance can also help fund a buy-sell agreement, allowing your business partners to buy your share and ensure the longevity of your business.
Term life insurance in a nutshell:
Basically, if you have dependents or debt you’ll want to consider term life insurance to make sure your loved ones are cared for and not stuck with your debt or a huge funeral bill.
A reputable insurance agent can help you find the best life insurance plan for your needs.