Top reasons for buying life insurance in the U.S.

Top reasons for buying life insurance in the U.S.

If anyone depends on you for financial support, you should own a life insurance policy for their protection. While the odds of you dying and your dependents actually needing the policy are low, they aren’t zero. 

Over the course of a policy, life insurance costs much less than the amount your family would receive if you died. And for many people, the price is worth the peace of mind that their family would be taken care of.

Why should you get life insurance?

Now a days, Life insurance have evolved. It provides Living benefits and death benefits, so your beneficiaries can use the payout for short- or long-term obligations and you can use it for your medical major expenses for chronic/critical and terminal disease. Common uses include:

  • Child or dependent care:  
  • Everyday expenses: Including bills, food, house cleaning, and other everyday needs.
  • End-of-life medical costs: 
  • Funeral expenses: 
  • Future education expenses: 
  • Investing: 
  • Outstanding debts: 
  • Accidents (The National Highway Traffic Safety Administration, a division of the Department of Transportation, estimates that nearly 43,000 people died in motor vehicle traffic crashes in the U.S. in 2021, up 11% from 2020 and 18% from 2019)

According to a 2020 report from trade research organization LIMRA and the non-profit organization Life Happens, these are the most common reasons Americans said they bought life insurance:

  • 84% Burial/final expenses
  • 66% Wealth transfer
  • 62% Income replacement
  • 57% Supplement retirement income
  • 50% Pay off mortgage

Key takeaways

  • Life insurance costs very little compared to the potential payout. 
  • The financial consequences for your family if you were to die without a policy in place would be significant. 
  • For anyone with financial obligations, the safety net of a life insurance policy is worth the cost.

Stats about the cost of life insurance

5 to 15 times • How much more IULs or Index universal life insurance costs vs. term life insurance but Index universal life insurance pays back as part of premiums invested to grow so you can get back what you in

4.5% to 9% • Average percent increase in your insurance costs as you age, assuming your health stays the same

2 to 3 times • How much rates for smokers cost vs. rates for non-smokers (but a year after you quit smoking, most companies will offer you non-smoker rates

39.6% • The average difference between the least expensive and most expensive rate for the same person across insurance companies, so good brokers/agents always compare price and share. We have approved license with AIG/Atene/ Nationwide / North American /F&G

24% • Percent difference between premiums for men and women (with women paying nearly 1/4 less than men, on average)

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