The following is a guest post.
It’s easy to be complacent when it comes to life insurance cover. Nobody likes to think too much about death, and if you’re young and in good health, the prospect seems far too distant to really worry about.
However, if you have debts that could potentially be passed on or dependents who rely on you, life insurance is a vital purchase for protecting your loved ones; and it’s never too early to get started. A 2011 survey by a leading insurance company revealed that around half of their life insurance claims were made for people aged under 55 – and almost one in five paid out for policyholders aged 44 or under. Obviously you hope not to fall into this bracket, but if you do, you’re going to want to know that your loved ones won’t suffer any more than they have to.
Expenses that can fall to your partner, dependents or next of kin on your passing can include the following.
- unpaid mortgages. For example if you have a joint mortgage with your partner, who can’t keep up the payments without your income.
- school and university fees for your children. The cost of higher education will keep increasing and a big student loan isn’t a good idea for someone just starting out in life.
- Funeral costs and a host of other day-to-day concerns you’ve probably never even thought about.
With life insurance you can make provisions to ensure either that your debts are paid off, or that your family received a lump sum to help them to cope in the immediate aftermath of your passing.
In addition to this peace of mind, there are financial benefits to getting insurance sooner rather than later. You can often negotiate a lower premium for a larger total pay-out if you’re younger. Also, many insurers factor your health into the cost of your premiums, so taking out a policy while you’re young and healthy can be better value.
On the other hand, if you’re a little older you can still get good value by seeking out an over 50s insurance specialist. These companies often offer better value by only dealing with selected insurers, and their benefits and optional extras are likely to reflect your needs.
Ultimately, whatever your age, there’s no way to predict the future. With a good life insurance policy behind you, you can at least enjoy the peace of mind that comes from knowing that your family are protected no matter what.
RIAS are specialists in providing exceptional value life insurance for the over 50s. Since 1992 RIAS have helped millions of customers enjoy comprehensive cover for a wide range of insurance products.
photo credit: flickr mariachily
{ 10 comments… read them below or add one }
I believe insurance would only make sense if you have dependents. Otherwise, it’s a total waste of money.
I would disagree with the article title. I dont’ think babies, 12 year olds or anyone under the age of 18 needs any life insurance.
I totally agree with you! As I recently started my career and my wife stopped working to be at home with our child I realized the importance of life insurance. Thanks for raising awareness on this issue as I think many young people who are starting their careers don’t consider this!
I’m only 17, so I wouldn’t need to take out a life insurance policy. This is mostly because my parents have a plan that covers me, until I am no longer a dependent of my parents. For that reason, I think I’ll be safe. On the other hand they do have the Gerber life plans for children.
Life insurance is a total waste of money. Before any one with kids looks into buying it, check out how much social security will pay you, combined with your workplace life insurance, both of which are completely tax free for your spouse, if you should die. Also, should I die, my wife immediately becomes eligible to withdraw my Roth IRA and 401k without tax penalty via an inherited IRA and inherited 401k. She still has her own retirement accounts, so not all will be lost either. That, and she’s only 35 years old, plenty of good years left to work if she needs to as our kids won’t be babies forever.
I am against life insurance even though my dad died when I was only 17 and he had none. Still, I am unfazed by this.
I don’t have a workplace life insurance anymore. That’s why I’m looking to buy some life insurance.
Social security would help a lot. I wouldn’t want my wife to withdraw from my retirement fund until she’s ready for retirement. I guess that’s just me.
Retire by forty, I would run the numbers first. If you have saved a significant sum in your retirement accounts, as I believe you have, you won’t need life insurance. Social security survivor benefits are completely tax free. Also, inherited 401k’s and IRA’s do not incur a 10% penalty on withdrawal. I did the math and my wife will be very well off if I die young, which I don’t plan on doing. Remember, only 3% of term life policies EVER get paid out. The rest simply expire.
If your wife is still working when you are dead, she won’t have to withdraw from your retirement accounts. With only one kid, this should be fairly easy to do, work that is. Your wife will also still have her own retirement accounts which will continue to grow while she works.
Dan, Term insurance is important to help people support a family after a spouse dies. Most people don’t have sufficient money in retirement to last long. One spouse with children would have to pay for childcare alone. Many people do not get any life insurance from employers. Term insurance is cheap and its a good idea for most. Yes you’re right that social security survivor benefits do help people but thats often not enough. Term policies usually don’t pay out but the risk is when they do, not when they don’t. My car insurance hasn’t paid me a dime but thats not a good reason to go without insurance.
JIm
No one is indeed too young for a life insurance. Life is unpredictable and we never know what will happen in the future. So it is better be ready than sorry.
I’d have to repeat my insistence that life insurance is only of value to people with dependents or who want to leave something behind for their charity of choice. For people who don’t, it’s a total waste of money.