The real value and purpose of life insurance.

by Steve Wilson on April 20, 2010 · 1 comment

in Life

Life Most people over the age of 25 have heard that we should have a life insurance policy on ourselves, and our family.  Even more so, when we start out our family life by getting married, and possibly having children, we are encouraged to take the steps of providing for our loved ones in the even that something detrimental happens to us. 

What saddens me is that many people do not heed these types of warnings, and take life for granted. Many tend to walk through life under the pretense that “it won’t happen to me…”

Life insurance may sound like something you only have to think about when you get older, but there are a variety of benefits to buying life insurance early on in your working career. Even if you don’t have a family that is dependent on you, or if you feel that your employer’s life insurance policy is adequate for your needs, there are many reasons why you should consider taking out your own life insurance policy.
If your employer provides you with a life insurance policy, you shouldn’t necessarily rely on it. While many companies may offer life insurance as one of the key benefits of a job, the figure often doesn’t cover enough to be of adequate benefit to your family – especially in the event of your death. For instance, many firms may offer life insurance that is one or two times the amount of your annual salary; but most financial planners will recommend replacing that with life insurance that covers up to 10 times your annual salary.

What would happen to your family if you never made it home from work today? If you were to die, would they be able to continue to live in the same house, and still be able to make the rent or mortgage payment? Would your children be able to go to the same schools, and still have a chance to go to college?  How can you be sure that you can provide for your family even after your death?  The idea of having a good life insurance policy is to take care of your family. You’ll need to have enough to pay off the house and any major outstanding debts, pay for your burial or cremation, and still leave enough that your family is able to take a time off to grieve properly.

Recently I learned that a family that entrusted me with their insurance needs did not have the appropriate coverage for their family.  Although we discussed the importance of life insurance, I didn’t probe far enough to be sure that they truly did have the right kind of coverage.  A young family, with three boys aged 13 and younger are left without a dad, a husband, and a provider.  Ultimately the responsibility does not lie on my shoulders, however  my perspective and my passion for protecting families is forever changed.  I still sense a bit of responsibility for not asking or encouraging it enough.  As a professional it is my duty to ask the right questions and ensure that everyone understands the importance and the real value of life insurance.

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