We can all agree that no one likes to think about dying. But unfortunately, this is a reality for everyone. Sometimes, this comes too early and causes financial hardship for loved ones. Life insurance can help with the financial impact of death, but people rarely understand how it works.

Most times, life insurance is pretty inexpensive and provides crucial protection for loved ones. Learn more about it, including how it can help, below.

What Exactly Is Life Insurance?

Life insurance provides a large payment to beneficiaries when an insured person dies. The payout might be hundreds of thousands of dollars (or more), and that money is often free from federal income taxes.

To get coverage, you submit an application, which typically involves answering health questions and may include a brief medical examination. Then, if approved, you pay premiums to a life insurance company for coverage.

Life insurance comes in several forms; you can categorize them broadly as term insurance and permanent insurance. Term insurance is the simplest and least expensive form of life insurance, and it’s an excellent choice for most families protecting themselves from the untimely death of a family member. With term insurance, you select a term (20 or 30 years, for example), and insurance coverage ends after that time.

Why Life Insurance Is Important

Life insurance provides much-needed funding when tragedy strikes. Some of the most common reasons to have life insurance include the following.

To Protect Dependents

If a spouse, children, or other loved ones depend on you, there’s a good chance you need life insurance. If you’re a wage-earner in the family, your death would leave dependents without a vital source of income. The result could be a domino effect of financial hardships that last for years.

Even if a family member does not earn an income, their death can have significant financial consequences. For example, losing a caregiving parent might require that the surviving parent hire others for caregiving, spend more time on household duties, or quit working altogether.

To Pay for Funeral Costs

When somebody dies, there may be several expenses related to their death. Besides any medical bills, you may incur final expenses, such as paying for a funeral, memorial, cremation, and more.

Funerals with a burial, and even cremation, cost thousands of dollars. This may be a substantial and unexpected bill for anybody coping with the loss of a loved one. Life insurance can help cover those costs and ensure that survivors can arrange a memorial that’s meaningful for them.

To Pay Off Debts

Life insurance proceeds can pay off debts that might otherwise leave your loved ones in a difficult position. Being debt-free provides significant relief if the household income drops or expenses rise from caregiving needs. Even if you don’t have family members depending on you, anyone who co-signed a loan for you will be responsible for your debts. Life insurance can prevent their good deed from becoming a burden.

Consider Life Insurance With Mints Insurance

Therefore, if you have a family—especially a young or growing family—it’s smart to explore your options before ruling out life insurance. The risk of leaving any loved one in a bind is too great, and the results can be devastating.

Reach out to us for more information on life insurance or to request a quote.