Talking about death is one of the most taboo topics that a person can bring up in American culture, which is way too many people are unfamiliar with all of the benefits that come with a Life Insurance policy. With several of my family members working in the insurance business, I am no stranger to the benefits that come with Life Insurance. Knowing that each of my family members has their life insured provides extreme peace of mind for me, personally. I think that it is vital to inform people of the benefits of Life Insurance, so should an event that changes the course of someone’s life take place, they are adequately prepared to handle the financial facets of death.
“Life Insurance” is a broad term, but is properly named because it covers nearly every aspect of one’s life. Many companies choose to refer to Life Insurance with other terminology, “Mortgage Protection Insurance,” for example. In the event of death, the insurance would be used primarily as a means to cover what is the biggest asset of many people – their home. The loss of a salary can mean big changes in one’s standard of living, and nobody should have to deal with the hassle of moving out of their home because they cannot afford it after the death of a loved one. Losing a spouse, sibling, mother, or father is stressful enough, but it can be minimized slightly by maintaining financial peace of mind.
There are several factors that deter people from getting a Life Insurance policy, but the benefits extremely outweigh the costs. As mentioned earlier, talking about death is uncomfortable for many people for a lot of reasons. People generally do not want to believe that they are going to die, or they fail to acknowledge death as a part of life. In addition to that, talking about finances is uncomfortable for the majority people. American culture is extremely private when it comes to money, and discussing it with a third party, like an insurance company, is often difficult. Another deterrent is that it may be difficult to discuss one’s health history with a third party. Many people like to keep their health private, but in order to provide adequate coverage, a comprehensive look into the history of one’s health is necessary. While these topics may be difficult to discuss, it is far more difficult to cope, grieve, and be financially unstable at the same time. While death or dying will always be an emotionally taxing experience, Life Insurance helps minimize the unnecessarily difficult aspects of it in order to properly grieve.
Consider a hypothetical scenario with a husband, wife, and their two teenage children, both of whom are enrolled in private high schools. The father works fulltime, bringing in about $90,000/year and the mother works part-time at a daycare bringing in an additional $20,000 for a total of $110,000/year for the family to live off of. The family pays $20,000/year in tuition, $350/month for their car payment, and $1,500/month for their mortgage payment. On his way to work, the father is involved in a fatal car accident. He did not have life insurance. With only the mother’s part-time wage, to live off of, she cannot afford the tuition or mortgage payment, let alone both. She struggles to pay for the car, too. On top of that, she is expected to cover funeral expenses for her late husband. This situation is complicated, and unfortunately all too common.
The scenario described above could have been avoided had the father carried Life Insurance. For a small payment each month, his family could have maintained their lifestyle, kept their home, and paid for the funeral. During an extremely stressful time period, like the grieving process, finances are the last thing that anyone should worry about. Life Insurance is a small price to pay to maintain one’s quality of life after a life changing event.
Maybe leaving one’s family comfortable after death is not enough of a perk for some people, and because of that, they do not think that life insurance is for them. It is a valid point; however, Life Insurance is a more versatile product than many people believe. Let’s go back to the hypothetical scenario from above, and alter the end so the father does not pass away in a car crash, but is instead diagnosed with terminal cancer, and has 6 months left to live. The cost of his medical bills puts the family in a place of financial hardship, since they can no longer rely on his salary. Certain Life Insurance policies are designed to benefit people in this situation, and may payout before death occurs in order to cover the medical bills related to the cancer. This is a scenario that not many people are familiar with, and may convince someone on the brink of purchasing Life Insurance that it is, in fact, worth the cost.
As evident by the information provided and the two hypothetical scenarios, Life Insurance is a complicated topic. Each insurance company’s policies are designed differently, and have different benefits during and after life. Regardless of which company someone has their Life Insurance through or which specific type of policy, it is important to recognize all of the benefits that come with having one’s life insured and relay that information to those who do not see why it is a necessary product.
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