Hopefully, you wouldn’t drive your car without automobile insurance, so why would you continue to go through life without life insurance? If you live long enough, you are going to die. It is just a fact, yet so many people treat getting life insurance like it is a chore. This is really an act of love and essentially allows for you to be replaced financially should something happen. Functionally, life insurance transfers risk: the risk of you dying and not having built enough wealth to provide for your family is transferred to the insurance company all for the cost of a couple pizzas every month if you go with term. That’s the real benefit of insurance.
A common mistake when selecting life insurance is picking policies that invest or save money in addition to providing the face value of the plan.Remember, the purpose of insurance is to provide for your family should something happen to you. I would do my investing and savings in index funds, exchange traded funds, real estate, and even a money market account. However, I would not try to combine my investments and insurance into the same vehicle. This often leads to overpayment and very rarely gives you a great return on investment.
Lastly, there are some who feel that they are “uninsurable” and fear going through an intrusive physical exam and then being rejected by the insurance agency. Even if they have some serious health problems, they likely can afford at least some life insurance, even if it is just a burial policy. Also, consider that a medical exam is not always required before obtaining insurance (you can find a whole page devoted to just this problem).According to Market Wire,
Investigate your options thoroughly. Deliberately foregoing life insurance is akin to gambling or using online payday loans with your family’s financial future. The well-being of your family is just too important to leave for chance.
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Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.