Life is packed full of difficult decisions, and whether to take out a life insurance policy is one of the biggest and most difficult. Here are the benefits and drawbacks of taking out a life insurance policy.
No one likes to think about what might happen should they die. But it’s the kind of thing that you should give some thought to. So, what are the main benefits of having life insurance cover? For me, the main reason for getting life insurance is the peace of mind it provides you with. You won’t need to be worrying about how your family will cope after you’ve gone because you know they’ll get some money to take care of themselves with. This money will never be enough stop the grief, but it can make the whole process a lot easier for them.
A lot of policies also give an option that allows money to be paid out in the event of the diagnosis of a terminal illness. Again, you don’t want to think about something like that happening to you, but having the money to ease the situation can be really help if that’s what happens.
Taking out a policy doesn’t have to cost the Earth either. If you shop around and compare as many deals as possible, you’ll be able to find yourself a good deal. If you’re looking to take out other forms of insurance policy too, you could save even more money by opting for combined insurance. This means your policies will be bundled together.
There are some drawbacks to take into consideration before you make a final decision on the policy though. Life insurance isn’t necessarily a good idea for everyone; it depends on your individual circumstances. For example, life insurance is made much more costly if you have a pre-existing medical condition. The insurance company will want to assess you and then they’ll decide if they want to offer you a policy and at what price. If you’re in a high-risk group, the costs will be higher.
Your family might not need the money either. If you are already relatively asset rich, that can be passed on to your family in the event of your death. This means that an insurance policy could be a waste of money for you. It’s a better option for people who don’t have much to pass on to their relatives. And if you don’t have any children, a policy is probably a waste of time for you.
You should also think about if you can afford to pay the monthly costs involved in taking out an insurance policy. It can be expensive, and you don’t want to be struggling to get by just because you want to pay for the policy. A lot of people would argue that life is for living and life insurance is a poor way to use your money while you are alive.
Like a lot of financial matters, your decision is entirely dependent on your own circumstances and concerns. If you don’t have much to pass on to your family and are worried about how they will get by should you pass on, life insurance could be a good idea.