May 25, 2021

Do I Really Need Life Insurance?

If something were to happen to you tomorrow, would anyone be affected? 42% of Americans say their families would face financial hardship within six months if a wage earner died unexpectedly, and 25% say they would suffer financially within one month.*

That’s where life insurance comes in: it’s a solution that provides financial security to your family to ensure no one you love is financially impacted in the case of your unexpected passing. So, whether you’re a mom of four, a single homeowner, 50-year old bachelor, or a recent college graduate, life insurance can help you build a solid foundation for a more secure financial future for yourself and your loved ones.

Do I need life insurance? 

No matter your age, financial situation, or family make-up, life insurance is a benefit we’d suggest everyone take advantage of. Life insurance can be used for a variety of purposes, including:

  • To provide a financial safety net so your family can continue to live the life you’ve helped provide
  • To cover debts including mortgages, student loans, credit card bills, car loans, etc.
  • To help cover the taxes on the proceeds your beneficiary will receive from your IRA
  • To gift to your loved ones without them having to pay income taxes
  • To cover your final expenses and funeral arrangements
  • To give back after your gone through charitable donations

Now ask yourself, “Are my loved ones protected if something were to happen to me?” If not, working with a BetterLife agent to create a customized life insurance plan is your first step.

When is the right time to purchase life insurance?

Three generations fishing togetherThe right time to purchase a life insurance policy is now. Life insurance premium rates are typically less expensive when you’re young and in good health. As BetterLife Agent Randy Augsburger says, “Once you feel like you really need it, you may not be able to get it. Even if you can get it, you’ll likely be paying much more for it.”

Even if you don’t feel like there’s room in your budget for an additional monthly bill, you can purchase an affordable Term Life policy. Then, at some point in the future, you can convert** your policy to something more permanent, like Whole Life or Universal Life. The benefit of our Term Life conversion is that you are guaranteed*** to qualify for life insurance at the time of conversion and you get to skip the underwriting process. In other words, you’ll get to claim the same health status that you were at the time you purchased your Term Life policy, which means you may get a lower rate than if you were to purchase your policy outright at the same time!

Isn’t the life insurance my workplace provides enough? 

Father and son taking a walk29% of American workers believe the coverage they get through work is enough.* This may be true for a select few of you, but in most cases, the life insurance coverage your workplace provides is more of a supplement to your primary plan.

The median life insurance protection offered at the workplace is either a flat sum of $20,000 or one year’s salary. Sure, that sounds like a decent chunk of money. However, more than half of U.S. households rely on dual incomes and, for many, losing one income could be devastating to the households’ finances.*

So, while employer-provided life insurance is a great start and a wonderful supplementary plan, there are a few important things Randy Kolarik, BetterLife Agent, says you should consider before assuming that it’s the right amount of life insurance for your individual situation:

  • If you leave or lose your job, in most cases you’ll also lose your life insurance policy.
  • If you leave or lose your job a little ways down the road, your age or health could make it difficult or even impossible to get a life insurance policy (or one that you can afford).
  • If you decide to retire at some point, your life insurance may not come with you.
  • Typically your employer controls the face value of your life insurance policy; therefore, you likely can’t customize your employer-provided policy to fit your needs.
  • The amount of life insurance offered through an employer may not be enough to properly provide for your loved ones in your absence.

To help determine if the life insurance provided through your workplace is enough, fill out our life insurance calculator.

Do I need life insurance for my mortgage?

If something were to happen to you before you finished paying off your mortgage, would you want your loved ones to be responsible for it? While it’s not required to purchase a life insurance plan when you buy a house, having a policy in place is a good way to financially protect the people you love.

New homeowners playing with their baby on the floorThink of it like this: how many bills are you currently responsible for? You’ve got your common utility bills, possibly student loans, maybe some credit card debt, perhaps a car loan (or two), and your mortgage. When you add all of those together, does it seem reasonable to assume that one income can cover the total amount? Also, keep in mind that there are still everyday costs like food, gas, etc. By covering your mortgage with a life insurance policy, your family will be able to continue living in your home after you’re gone.

At BetterLife, we offer a plan that partners with our Universal Life Insurance policy to help you pay your mortgage while you’re still here AND cover the remaining balance once you’re gone: the Bi-Weekly Benefit Plan. Instead of paying your entire mortgage once a month, we’ll draft your account for half of the amount every two weeks and make your mortgage payment for you. By paying every other week, you are making two additional half-payments each year, which helps fund your flexible Universal Life Insurance policy! Learn more about our Bi-Weekly Benefit Plan here.

I’m young and single; do I really need life insurance?

There’s a common misconception that if you’re young and single, you don’t need life insurance. However, the reality is that most of us have someone in our lives whom we love and none of us are invincible. You never really know when your time will come; isn’t that why they call it the “unexpected”? So when that time does come, don’t you want the people you love to be financially protected?

A girl and her dogAdditionally, when it comes to life insurance, you need to think of your future-self. Do you have dreams of having a family one day? Getting married? Buying or building a home? As mentioned earlier, by getting a convertible life insurance plan in place now, you’re guaranteeing*** that you’ll have the opportunity to continue your coverage later in life. And, by getting permanent life insurance now, you’ll have protection that lasts your entire lifetime!+

There are plenty of things that can come in between you and an approved life insurance application; age is just one of those barriers. Often times, with age comes more health issues – yet another obstacle you may need to surpass in order to get the coverage you’d like at a price that works for you. Ultimately, purchasing life insurance now – when you’re young and single – means you’re building a more budget-friendly safety net for the future you’ve been dreaming of.

So now we ask again: if something were to happen to you tomorrow, would someone be affected? If your answer is “yes”, reach out to schedule an appointment today. We’d love to chat with you to take a look at your individual needs and decide which protection plan best fits your life.

In the meantime, if you’re interested in finding out just how much life insurance you may need, visit our life insurance calculator here!

Sources & Disclaimers: *Life Happens & LIMRA, 2021 Insurance Barometer Study **As long as you pay your premiums and convert to whole or universal life insurance, you can convert your term life policy until the end of the initial term or age 70, whichever is earlier. ***Guarantees are backed by the financial strength and claims-paying ability of BetterLife. +As long as you pay your premiums.