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Should I Purchase Life Insurance?

Should I Purchase Life Insurance? Team
UpdatedOct 28, 2010
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    1 min read
Key Takeaways:
  • Why Life Insurance may be right for you.
  • Who benefits from your Life Insurance policy.

Why Life Insurance may be right for you

Life Insurance is the only insurance policy where you will never collect the benefit. With a few notable exceptions to the rule (see Types Of Life Insurance), you will make regular payments to the insurance company without ever seeing a dime in return. So why should you purchase Life Insurance?

Your Beneficiaries

For the vast majority of people who do not use Life Insurance as a store of value or a way to lower tax payments, Life Insurance is a necessary burden to ensure the protection of their dependants and loved ones.

Look around you. Who would take care of your spouse, your children, or other beneficiaries if you passed away tomorrow? Would they be financially secure or would your passing place them in a financial hardship such as a foreclosure on their home? These are the things that most people would rather not think about – but they should, in order to secure the future of their loved ones.

If the following two statements are true then you should purchase Life Insurance.

  1. Your death would put people you care about in a financial bind.
  2. You do not have the means to set aside enough money for those people today.

If these two statements are not true then you are most likely better off saving your money rather than investing in a Life Insurance policy.