FAQs
If you or your partner were to pass away, life insurance can help pay for child care, daily living expenses and higher education. Life insurance makes it possible for your children and loved ones to continue living life as normally as possible, after your passing, without a huge financial burden.
What is the primary reason for buying life insurance? ›
What is considered to be the primary reason for buying life insurance? the primary reason for purchasing life insurance is to provide death benefits.
Which of the following is the best reason to purchase life insurance? ›
According to a recent NerdWallet study, the most common reason Americans buy life insurance is to cover final expenses. The second most commonly selected reason is to leave an inheritance, followed by covering large debts, replacing an income and building an investment.
What is the reason that a person buys health or life insurance? ›
limit the amount of financial loss if there is an illness, injury, or loss of life.
What is the main purpose of life insurance? ›
In exchange for a premium, the life insurance company agrees to pay a sum of money to one or more named beneficiaries upon the death of the policyholder. The purpose of life insurance is to help provide financial security to your loved ones upon your death. However, some life policies also offer living benefits.
What is the main reason that people purchase insurance policies? ›
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident.
Do you really need life insurance? ›
Not everyone needs life insurance. People who've accumulated enough wealth to cover their final expenses and who don't have dependents can usually forgo paying for life insurance.
What is the main factor you should consider when buying life insurance? ›
The most important factor you must consider when it comes to buying life insurance is how much coverage you need. That will likely depend on your life situation.
When should you get life insurance? ›
The best time to buy life insurance is usually as soon as possible. That's because the younger and healthier you are when you purchase a policy, the lower your premium will generally be. If you're single with no children, life insurance may not be a priority.
Why do people put off buying life insurance? ›
The subject is boring and morbid
If you really don't like to think about death, you're not alone. Death is an unpleasant subject, and life insurance raises issues of our own mortality. Some people say that the very thought of starting the life insurance buying process makes them feel stressed out.
Life insurance pays out a death benefit to your heirs when you pass away. Retirees must balance life insurance benefits against the ongoing costs, especially if they lose their job-based coverage. If you retire with debt or still earn some income for your family, keeping life insurance in retirement is a good idea.
Is it worth getting life insurance? ›
In general, life insurance is worth it if your death would place a financial burden on other people. Consider getting coverage if: You want to cover your own burial costs. Funerals can be pricey and your loved ones may not have the cash to cover the bill.
Why do millionaires buy life insurance? ›
Life insurance is a popular way for the wealthy to maximize their after-tax estate and have more money to pass on to heirs. A life insurance policy can be used as an investment tool or simply provide added financial reassurance.