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A Complete Guide to Why Life Insurance is Important

Why is life insurance important? A teal paper cut out of a family holding hands. Someone holding their hands over the paper cut out family.

If you were to pass away tomorrow, what would happen to the people in your life?

When you’re young, single, and healthy, death probably doesn’t cross your mind often.

The truth is, if you have stakeholders in your life, your passing can have an enormous impact on their lives. This is why life insurance is important — it manages and protects what you leave behind, which is more than you may realize.

In this article, you’ll learn four key benefits of life insurance. If any of these apply to you, contact Lake Region Insurance Agency to get started on a quote.

Protecting Your Loved Ones

Paper cutouts of a car, family, and home covered by someone's hands

In 2020, the life expectancy in the U.S. dropped by 1.5 years, lowering to 77.3 years. As you can imagine, COVID drove the largest decline in life expectancy since WWII, as roughly 375,000 Americans died from the disease.

Countless individuals bore the financial fallout from losing loved ones far too soon. These financial hardships highlight the main reason why life insurance is important — providing for your family if you pass unexpectedly.

If you’re in your 20s or 30s and healthy, you can get a plan with a death benefit of a few hundred thousand dollars for less than $50 a month*. Imagine the difference that money could make for your spouse and children if they suddenly have to overcome the lost income.

You can give your loved ones a safety net of both money and time. They won’t have to make immediate, dramatic adjustments and wonder how they’ll pay the mortgage. The death benefit buys them relief, options, and time to make the best decisions.

In a general sense, if a person’s livelihood relies on the money you provide, you need life insurance.

Is there anyone other than the family at home that depends on your income?

Maybe you have aging and ailing parents or a struggling friend who needs your help regularly. You could have business partnerships or even a charity you strongly believe in that could use and appreciate the support. 

A small monthly investment can help them manage the long-term effects of your passing. It is a powerful and worthwhile display of responsibility and love for those who are meaningful to you.

Paying for Outstanding Debt

A stack of coins with wooden stacked against against them.

Maybe you’re single with no kids and your parents are doing just fine taking care of themselves. You may think, “If nobody would suffer any financial setback if I stopped bringing in money, why should I bother with life insurance?”

The problem is that if you die, although your loved ones may be taken care of, your debts are not. In many cases, any loans or other debts aren’t discharged but are instead transferred to your estate.

When you’re young, especially in your 20s, it’s common to take on debt to secure your new life of freedom and responsibility.

Thousands of young adults take on student loan debts to earn their dream job. Others take out small business loans, buy a house and a car and open new lines of credit. While some of these accrued debts may fall off when you pass away, any co-signers or co-owners on loans will stay on the hook.

Your parents may not need your help with paying rent. But can they afford to take on extra monthly bills to pay for those private loans or that car they co-signed for? Buying a life insurance policy can keep them from assuming unmanageable expenses. 

Covering Funeral Expenses

Why Life Insurance is Important, it can help cover funeral expenses. Someone putting coins into a jar for funeral expenses.

The median funeral cost is a little over $7,000. If you’re at the point where you’re still wondering, “Should I get life insurance?” you also probably don’t have a special savings account to cover those costs.

When you are debt-free with no dependants, having a small, inexpensive policy to cover funeral expenses (plus a little extra) is well worth it.

Even if you don’t care about having a big funeral, remember that a funeral is more for the living than for the dead. A funeral is the emotional epicenter of a loved one’s passing, and family members deserve to feel proud in honoring you to the fullest.

Providing money for final expenses ensures your family doesn’t have to compromise. If they can celebrate your lasting legacy as they see fit, you provide satisfaction, making the emotional transition to life after death much easier.

Getting It Early, Getting It Cheap

A couple purchasing life insurance.

You don’t have to wait to get life insurance until you have debt or a family that depends on you. As strange as it may seem, there’s a good reason to get it early.

The younger and healthier you are when you get life insurance, the cheaper it will be. If you foresee marriage, children, a new business, or any other major change on the horizon, getting a term plan early can save you big money in the long run.

For example, if you’re 25 and healthy, you may get a 30-year plan for $20 a month*. That’s a locked-in rate for the full 30 years of coverage.

If you wait until you’re 35 with a family, that same plan may cost you $30 a month*. Plus, any new health conditions, genetic predispositions, or family history will push those rates even higher.

If circumstances change, you can always change beneficiaries or add extra life insurance. Getting started early will get you the largest death benefit for the lowest price.

Do You See Why Life Insurance Is Important to You?

An older couple in retirement.

If any of these reasons why life insurance is important makes sense for you, it’s time to get started, so you can get the absolute best deals.

Lake Region Insurance Agency is committed to providing Minnesota families with the best life insurance policies that are custom-fit to meet their needs and goals. If you live in New London, Willmar, or Cokato, Minnesota, visit our offices or get a quote to start finding the right policy for you.

* prices are just an example and may not reflect the cost of a life insurance policy from Lake Region Insurance Agency.

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