You insure your house, your car, your boat and many other things in case something unexpected and catastrophic happens. You also do this because you need to. They won’t give you a mortgage without house insurance and you face a big fine for driving an uninsured vehicle. There are very few transactions that require you to get life insurance. If it is not required for you to buy, is it worth owning?
As with everything in life the answer to this is not an absolute yes or absolute no. We like to think that the pros far outweigh the cons though. Typically we see people seek out life insurance when they have reached some sort of milestone event in their life. Getting married, having a baby or buying a house are some of the biggest triggers. These events tend to be the ones where you take stock of the fact that if you weren’t around, helping contribute income or other help to your family, there would be a financial impact on someone that you care about. When this realization happens the decision to get life insurance moves more to the forefront of peoples minds. Term life insurance in particular is a cost effective way to provide your loved ones with protection from potentially life altering decisions being made based purely on finances.
Another event that often triggers people looking for insurance is a friend or family member getting sick. Especially when it is someone around the same age as you. Nothing makes people face their own mortality more than this type of event. When someone realizes that ‘it can happen to me’ they look around and think about who would be affected if they were gone. When you get over the feeling that it can’t happen to me, you begin to plan for when it happens to you.
In the life insurance industry we get peppered with thought provoking questions to ask our clients. A big one is to ask someone ‘What do you think your biggest asset is?’. Obviously this is a leading question as we know what answer we are looking for when we ask this. The answer we work off of is that everyone’s biggest asset is their ability to earn an income. If you weren’t around and adding your income to your family’s life, how would that effect things? Think about the effect of your income disappearing would have on your family. Would they be able to maintain their lifestyle? Would they be able to take time to adjust to the new normal that follows an event like someone passing away unexpectedly?
Answer the questions honestly. Have an open conversation about it with your loved ones. Typically the answer to the question lands at “Yes, Life Insurance is Worth Getting”.