When you hear talk about life insurance, then you would be forgiven for assuming that this applies mostly to those who are married with children. Life insurance is of course a form of insurance that pays out in the scenario that you should pass away, meaning that your surviving family members will have the money they need in order to continue living in the style to which they have become accustomed, and to ensure they are as healthy and looked after as possible in your absence.
Thus the average age of someone considering life insurance is normally mid-twenties to thirties. Often they will then take out a fixed-term life insurance policy, or a decreasing term life insurance policy. This means that the life insurance policy is valid for a specific amount of time and then runs out. In the latter case it more specifically means that the life insurance policy is valid for a certain amount of time, but also that it will decrease in value and cot as that time goes on. Many people will use this form of life insurance in order to protect their family while they are dependent on them, but will then cancel it once their children have moved away and their mortgage has been paid off (often a decreasing term life insurance policy will be selected in order to ensure that the mortgage will always be paid off if nothing else).
However this isn’t the only content in which to use life insurance. At the same time it is also quite common for people to take out what is known as ‘whole of life insurance’ which is valid until they die. Likewise some parents will take out life insurance policies for their children even. When these demographics have no one relying on them financially you might wonder – what is the purpose of the life insurance?
Well actually there are many good reasons to take out life insurance for both the very young and the very old. First of all this is true because life insurance doesn’t only cover living expenses – it also covers funeral expenses and costs such as gravestones. These are very expensive costs and they can be crippling financially if you are unprepared for a parent or a surviving partner meaning that life insurance can really help.
At the same time you might also view life insurance as a gift. Of course on the one hand it means that should the worst happen to you, your family will at least have some financial compensation. It won’t bring you back no, but it will mean that they have one last very helpful gift from you. If you don’t have many savings when you are older but you want to leave something to your grandchildren then this is a good way to do so with whole of life insurance.
Life insurance can also be an investment. For a parent of a young child it again can provide some financial support during what will be one of the most painful and difficult times in their lives. However at the same time it also can provide the child with pay outs – both during the term and when it is over. If you use life assurance, which is very similar to insurance but pays you a portion of the interest on some of the money that gets invested, then this payout can sometimes be quite large.
If you have the finance then, and if you are a ‘forward planning’ kind of person, then life insurance can benefit you no matter your age or situation.