Every one of us wakes up in the morning not sure if we will return home safe or see another new day. But why leave fate to chance?
Taking out life insurance is an excellent way to stay at ease knowing that your loved ones will be taken care of even after you’re gone. This policy allows you to go about your daily life, giving your best and without worrying too much about death.
Sadly, a lot of people continue to live without life insurance, even when they know how beneficial it can be to them. If this sounds like you, our article is for you. Inside, we will explore the risks you’re dealing with without life coverage.
But first, let’s start with some basics;
What is Life Insurance?
In simple terms, this is a contract between an insurance policyholder (you) and an insurance company where the latter agrees to pay an agreed amount of money in exchange for a premium upon your demise or after a specific amount of time.
In the event of the risk occurring, life insurance pays out a lump sum or even regular monthly amounts, as in the case of income protection, to safeguard the future of your loved ones.
Risks of Not Taking Out Life Insurance
1. Leaving your family unprotected
The purpose of purchasing life insurance is to provide for your loved ones after your passing. Without it, your loved ones who are still depending upon you could face a dire financial situation.
Other life insurance policy types like income protection can also efficiently replace lost income in the event of an illness or injury that stops you from taking care of your family. This income protection comparison platform is an excellent place to start if you’re looking for this type of coverage.
2. Depending on others upon retirement
Let’s face it; you’ll eventually retire and it’s unlikely that social security will pay out completely. Without a retirement plan in place, you run the risk of becoming a burden and dependent on your loved ones.
Taking out life insurance that covers most of your post-retirement obligations is highly recommended. A policy such as Over 50s life cover can ensure that your dependents are taken care of should you pass away before they leave your nest.
3. Being vulnerable to debt traps
This mainly applies if you pass away with unpaid debts and no life insurance. In most cases, your family may be responsible for paying off that debt.
And even if you don’t have an outstanding loan, your death can force your family to take one to give you a decent sendoff. This is probably not something you’d like them to do which is why getting the right life insurance policy makes so much sense.
4. Risking your children’s education and future
The first financial priority for anyone with children should be life insurance. Who will take care of their daily requirements as they grow and contribute to their education if they pass away without life coverage?
To avoid risking your child’s future, we highly advise you to get comprehensive life insurance that includes a child plan. Even if you aren’t around, this plan will take care of your child’s financial needs until they are done with school.
5. Not being able to save on taxes
A significant portion of your pay is withheld by the government each year in the form of taxes. Luckily, there are various ways to reduce income taxes, one of them being to buy life insurance.
You can receive tax benefits when you take out a life insurance policy. Besides, income received as a consequence of a life insurance death benefit is not always required to be disclosed and is therefore exempt from taxes.
6. Life insurance becoming more expensive
Assuming you will eventually take out life insurance (whether willingly or upon being forced by circumstances to do it), you risk paying a lot more in premiums later in life than if you did it now. The premise behind it is that the longer you wait to buy coverage, the higher the insurance premium.
This is because insurers consider you to pose fewer risks to them as you’re in better condition at a younger age. The reward for this is being eligible for lower premiums.
As you age, you will likely develop various health issues that make you a lot riskier to cover or even ineligible for coverage.
The future remains uncertain to all of us. Taking out life insurance helps you approach life and whatever it throws at you with more peace of mind.
Life insurance guarantees that your family is protected should anything happen to you. Eliminate the six risks highlighted in this post and live happily ever after.