6 Consequences of Living Without Life Insurance

Due to widespread misconceptions and a lack of general consumer understanding about life insurance products, millions of Americans who should have life insurance are living without it. To better understand the importance of having life insurance and the protection it provides, look at six consequences facing people who are not insured.

1. Susceptibility to Debt Traps

Many consumers living with debt don’t want to spend money on products like life insurance until they’ve paid down their debt. While understandable, the logic behind this is flawed. Without life insurance, you could face a financial calamity that greatly expands your existing debt burden. If you have outstanding debts, including student loans, at the time of your death but no life insurance, your family may be held liable to pay off those debts.

2. Risk of Financial Disaster

Living without life insurance, you’re almost always closer to the brink of financial ruin that someone with life insurance coverage. A medical emergency for which life insurance benefits could be pulled to help cover could spiral you into debt. Should you die an untimely death, your dependents will find themselves living in financial crisis.

3. Safety Net Not True Safety Net

A savings account intended specifically for emergencies or unexpected expenditures is hardly a safety net if you don’t have life insurance. If you develop a terminal illness or die unexpectedly, your safety net will likely be drained fast. You or your family is likely to take on debt as well.

4. Children’s Education and Finances

One extension of the aforementioned concern is the financial security of child dependents. If you die prematurely and without life insurance coverage, who will care for your children’s basic needs as they grow and help finance their education? If you have children, life insurance should be a top financial priority.

5. Retirement Planning Concerns

How does the prospect of depending on others for your financial well-being in retirement sound to you? If it’s unappealing, make life insurance protection a part of your retirement plan. Carefully plan for your retirement, ensuring it includes substantial life insurance coverage. If a dependent partner outlives you, the death benefit from your life insurance policy can make the difference between financial freedom and financial anxiety.

6. Tax Benefits

Buying a life insurance policy entitles you to income tax benefits. Most income obtained as a result of a life insurance death benefit does not have to be reported, making it tax-free income.

Do you have a better handle on how risky it is to live without life insurance? If you have questions about life insurance coverage or are looking for a policy that’s well-suited to your life’s circumstances, work with a Brokers Alliance approved life insurance provider to secure coverage that can spare you and your loved ones from financial ruin. Call (800) 290-7226 to learn more about the tools, products, and resources brokers have access to when working with us.