4 things you might not know about life insurance

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There are certain expenses that we are all used to paying for each month, such as rent, utilities, and food. And if life insurance isn’t already an expense in your budget, you might be hesitant to pick up 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 provide some peace of mind in your life. If you don’t know much about life insurance, here’s some important information to keep in mind when you start pricing coverage.

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

You might assume that life insurance isn’t necessary until the kids kick in. But even if you don’t have kids and expect to stay that way for the long haul, it might always be beneficial to purchase life insurance to protect other important people in your life, such as your spouse or different family members you support.

Imagine that you and your spouse own a house together. You may be able to cover your housing expenses with your joint income, but what if you die? At that point, your spouse might have trouble paying the mortgage. Life insurance, however, could prevent a scenario where your spouse might lose the house they used to live in.

2. It doesn’t have to be expensive

Many people assume that life insurance is very expensive. But if you buy a term life insurance policy, you may find that it’s more affordable than expected. Since term life insurance only covers you for a set period of time and does not accumulate cash value, it is less expensive than whole life insurance. But you may find that it gives you more than enough coverage to meet your needs.

3. Some types can serve as a source of cash

Whole life policies accumulate cash value over time. It’s money you can borrow when needed, or even cash out if you choose to go that route. Of course, the funds you withdraw from a life insurance policy will not be payable as a death benefit, but you get that flexibility.

4. You can qualify even if you’re not in excellent health

The healthier you are when you apply for life insurance, the less likely you are to pay premiums. But that doesn’t mean you’re guaranteed to be turned down if you have pre-existing conditions.

Of course, it’s a good idea to work on improving your health before you buy life insurance. But there are some medical issues you can’t get out of just by exercising. And in that case, don’t assume all is lost.

Purchasing life insurance is an essential step in protecting the people you care about. But you will have to go there armed with knowledge. Therefore, take the time to educate yourself on how life insurance works to determine which type of policy is right for you and how much coverage you really need.

The Ascent’s picks for the best life insurance companies

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