Life and Mortgage | Wes Anderson

Life Insurance

Be Ready For The Unexpected

Insurance is one of the pillars of personal finance, deserving of consideration by every household. I’d even go so far as to say it’s vital for most. Yet, despite its nearly universal applicability, there remains a great deal of confusion, and even skepticism, regarding the many types.

Perhaps this is due to the inherit complexity, the posture of those who sell it, or merely our preference for avoiding the topic of our own demise. But armed with the proper information, you can simplify the decision-making process and arrive at the right choice for you and your family.

I suspect we don’t like talking about insurance because we don’t like the idea of passing on. Open and honest discussions about planning for an unexpected situation can be surprisingly life-giving. Even if you don’t like dealing with the ideas around that, the chances are good that purchasing the right insurance is still an important part of your long-term and comprehensive financial plan.

A couple of facts regarding Life Insurance

1. If anyone relies on you financially, you need life insurance. It’s virtually obligatory if you are a spouse or the parent of dependent children. But you may also require life insurance if you are someone’s ex-spouse, life partner, a child of dependent parents, the sibling of a dependent adult, an employee, an employer or a business partner. You may even consider using life insurance as a strategic financial tool.

2. Life insurance does not simply apply a monetary value to someone’s life. Instead, it helps compensate for the inevitable financial consequences that accompany the loss of life. Also known as Income protection. Strategically, it helps those left behind cover the costs of final expenses, outstanding debts and mortgages, planned educational expenses and lost income. But most importantly, in the aftermath of an unexpected passing, life insurance can lessen financial burdens at a time when surviving family members are dealing with the loss of a loved one. In addition, life insurance can provide valuable peace of mind for the policy holder. That is why life insurance is vital for anyone with financial obligations.

3. Life insurance can be extremely expensive, but it can also be surprisingly inexpensive. If you apply for the bells and whistles permanent policy, the price of the premiums alone might cause you to run away. However, most people are pleasantly surprised when they see the relatively low prices of a plain policy that suits their needs.

4. Determining the optimal life insurance policy for you doesn’t have to be complicated. While we could get really specific with a detailed life insurance analysis, it’s way more important to get set up with something you can understand than it is to push off an important decision due to life insurance’s intimidating complexity. In the vast majority of situations, a household would be well cared for simply by buying enough life insurance to cover all (or most of) the needs for a short term as long as the household expects to need that coverage.