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Why is it important to have life insurance?

You know you need life insurance, but you haven’t gotten around to buying a policy yet. Here are seven reasons to pick up the pace on getting covered.

Why should you buy life insurance

A good financial plan is like a jigsaw puzzle with different pieces addressing specific needs. Saving, paying off debts, growing your wealth, protection — all working together to maintain your financial health. You might be hard at work on the first three things on that list. But have you given thought to the protection part, which includes buying life insurance?

I bought a  term life insurance policy when I got married in my early thirties. The coverage gave me tremendous relief to know I had a financial backup plan for my partner and our shared bills. And now that I’m a single parent, it’s even more important to know that my kids have a financial safety net if something were to happen to me.

If you haven’t gotten life insurance yet, you might just need a little nudge to complete that task on your to-do list. It’s an important one. Here, seven reasons why life insurance is a smart move.

1. It’s a financial safety net for your loved ones

You love your spouse, your kids, your parents. The last thing you want is for them to be left in a lurch financially if something were to happen to you.

The primary reason for purchasing life insurance is to help your loved ones shoulder the financial burden of your death. The proceeds from your policy can go towards burial expenses and everyday bills or bigger things like a mortgage or your kids’ education when the time comes.

Life insurance needs aren't one-size-fits-all.

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2. You don’t want to leave debt behind

Ideally, you’re working hard to pay down your debt, but life doesn’t always follow our plans. If you were to die suddenly, you wouldn’t want your family to be left with the burden of credit cards, car loans, student loans or a mortgage. If you purchase enough coverage, a life insurance policy could help clear the deck so those bills aren’t hanging over your partner or loved one’s heads.

This is an especially important consideration if your parents cosigned on your private student loans or other liabilities. Being left with those debts could put a strain on their finances at a point in life when they might be readying for retirement.

3. You own a business

Speaking from experience, being your own boss is great. I work solo but you might have a business partner or run the business with your family’s help. Life insurance can help protect the investment of time and money you’ve made in the business.

Even if you’re a freelancer like me, you could still benefit from having life insurance. Your loved ones could use the proceeds of your policy to help pay outstanding loans or credit card debt owed by the business.

4. It’s your legacy

If you’re in your 20s, 30s, or 40s, you might not be thinking about the legacy you want to leave behind. But, it’s never too soon to consider it. Ask yourself what you want to leave behind for your kids. Maybe you want to leave something to charity as well. A life insurance policy can help fulfill those future wishes you have.

Life insurance can also be a tax-efficient way to pass on assets to your loved ones. Generally, payouts for term life insurance policies aren’t subject to federal income tax, which makes it useful in estate planning. And, your beneficiary won’t have to wait for your life insurance to go through probate with the rest of your estate.

5. It’s affordable

The most common roadblock to getting life insurance can be the assumed cost of premiums. Getting covered, however, can be pretty affordable.

Here are a few examples of monthly premiums for a term life insurance policy. The cost of coverage varies based on factors like age, gender, health, term length and coverage amount. These premiums are for non-smokers in excellent health.

 AgeCoverage AmountTerm LengthPremium
Female25$500,000 20-year term$16.95
Female30$500,000 30-year term$30.23
Male35$300,000 20-year term$15.92
Male40$500,000 20-year term$30.59

You’ll get the best rates the younger and healthier you are but don’t let age or health put you off. Even if you’re in your 30s, 40s or even 50s already, life insurance can still be a sound — and budget-friendly — purchase.

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6. Buying life insurance is easy

I put off buying life insurance for the longest time because I knew it was going to be time-consuming to fill out paperwork, go through medical underwriting and wait a few weeks for my final rate and coverage to start. Fortunately, now, it’s simple to buy a term life insurance policy. With startups like Haven Life, which is backed and wholly owned by leading life insurer MassMutual, the process has become much simpler. Through Haven Life’s process, you can easily apply online and find out instantly if you’re approved for coverage. In some cases, no medical exam will be needed to finalize coverage. [Keep in mind that issuance of the policy or payment of benefits may depend upon the answers to health questions given in the application and their truthfulness.]

It’s a modern way to buy life insurance that leaves you with no excuses for putting it off.

7. The peace of mind is worth it

We all want reassurance that we’re doing the right things with our finances and protecting our families. That’s what life insurance can give you. Life insurance can give you peace of mind in knowing that if the worst were to happen, you’ve helped to financially protect the people who are most important to you. In the meantime, you can live life and enjoy your family which is what matters most.

There’s really no reason to go without life insurance if it’s something you need. As you work on your family’s financial plan, remember to pencil in time to consider what kind of life insurance would be best, for you – what you need the policy to cover and how much coverage is enough. This is time well spent, protecting your family’s financial future.

It’s not just easier life insurance, it’s an easier life.

Learn about the perks that come with being a Haven Term policyholder.

Explore Haven Life Plus

Rebecca Lake is a freelance writer specializing in personal finance and small business. She lives on the North Carolina coast with her two children.

Haven Life Insurance Agency does not provide tax or legal advice, and this information is not written or intended as such. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.

Chelsea Brennan

About Chelsea Brennan

Chelsea Brennan is the founder of Smart Money Mamas, a personal finance blog that focuses on family finance, investing, and reducing money stress. Chelsea is an ex-hedge fund investor whose work has appeared in a wide array of publications, including Forbes, Business Insider, and more.

Read more by Chelsea Brennan

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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