Why is Life Insurance Important?
In the COVID-19 world, many are uneasy about the “what ifs” of life. As we grow older, get married, and build families, we come to realize more and more that life insurance is fundamental for a financial plan that provides security to loved ones in the event of death. The devastating financial consequences of a loved one’s death can be alleviated by planning for their future now.
Depending on the type of policy, life insurance can be affordable. Company owners often offer employer-paid life insurance policies to their employees as a blanket of protection for their families. There are three different types of life insurance, all with their own benefits and complexities:
- Term life insurance. This policy stays in place for a set period of time. The policy has no cash value and depreciates as you get older. Most employer-paid plans are term life policies. These policies can be converted in the event that the employee loses employment.
- Whole life insurance. This type of policy enables you to build cash value overtime. The cash value acts as an extra cushion that can be accessed at any time.
- Universal life insurance. This type of policy is tied to a specific investment product and the policyholders receive dividend payments.
Here are five important reasons why you need life insurance to provide financial security for your family:
Financial Protection for Family and Loved Ones
If your family depends on your financial support for their livelihood, life insurance will replace income when you die. This is important for parents of young children or adults who would find it difficult to maintain their standard of living.
Leaving an Inheritance
Unfortunately, any people do not have an inheritance or any other assets to pass to their family. With life insurance, you can create an inheritance by buying a life insurance policy and naming loved ones as “beneficiaries”. If you have children, this is a great way to set them up for a solid financial future and provide for any monetary needs that may arise.
Paying Off Debts
Life insurance also provides income for your family or beneficiaries to cover everyday living expenses, outstanding debts, mortgage, credit cards, car loans, and any other financial burden that may result from your passing. Other expenses include funeral and burial costs that can often exceed tens of thousands of dollars.
Financial Security
Most parents want to know that their kids will be well taken care of in the event of sudden death. Life insurance can help with a quality education or other life ventures, such as getting married or starting a business. These are some of the reasons why additional coverage is essential with dependents.
Peace of Mind
We can’t predict our future, but having adequate life insurance will bring peace of mind, not only to the policyholder, but to those who will lose you. No amount of money could every replace a person, but more than anything, life insurance can help provide protection for the uncertainties in life.
If you would like to consider offering this benefit to your own employees, we encourage you to reach out to the licensed sales representatives at ARC Benefit Solutions to help you sort through your options.
