4 Things You May Not Have Known About Life Insurance

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Don’t be in the dark about this important coverage.

Key points

• Some people don’t purchase life insurance because they’re not sure how it works or if they need it.
• It’s important to educate yourself about different types of life insurance so you purchase the right coverage.
• Some of the things to know are that it doesn’t have to be expensive and a pre-existing condition doesn’t have to stop you.

There are certain expenses we’re all used to paying for every month, like rent, utilities, and food. And if life insurance isn’t an expense that’s in your budget already, you may be hesitant to take on that extra bill.

But life insurance is an important thing to have. It protects your loved ones in case something happens to you, and it can buy you some peace of mind as you go about your life. If you don’t know much about life insurance, here are some important tidbits of information to keep in mind as you start pricing out coverage.

1. It’s something you might need even if you don’t have children

You might assume that life insurance isn’t necessary until kids come into the mix. But even if you’re child-free and expect to remain so for the long haul, it could still pay to buy life insurance to protect other important people in your life, like your spouse or different family members you support.

Imagine you and your spouse own a home together. You may be able to cover your housing expenses on your joint income, but what if you pass away? At that point, your spouse might struggle to pay the mortgage. Life insurance, however, could prevent a scenario where your spouse risks losing the home they’re used to living in.

2. It’s not necessarily expensive

Many people assume that life insurance costs a lot of money. But if you buy a term life policy, you may find that it’s more affordable than expected. Since term life insurance only covers you for a preset period of time and it doesn’t accumulate a cash value, it’s less expensive than whole life insurance. But you may find that it provides you with more than enough coverage to meet your needs.

3. Some types can serve as a cash source

Whole life insurance policies accumulate a cash value over time. That’s money you can borrow against as needed, or even cash out should you choose to go that route. Of course, any funds you cash out from a life insurance policy won’t be payable as a death benefit, but you do get that flexibility.

4. You can qualify even if you’re not in the best of health

The healthier you are at the time you apply for life insurance, the less you’re likely to be charged in premiums. But that doesn’t mean you’re guaranteed to be denied if you have pre-existing conditions.

Of course, it’s a good idea to work on improving your health before applying for life insurance. But there are some medical issues you can’t simply exercise your way out of. And in that case, don’t assume all is lost.

Buying life insurance is an essential step toward protecting the people who are important to you. But you’ll need to go in armed with knowledge. As such, take the time to read up on how life insurance works so you can determine which type of policy is best for you and how much coverage you actually need.