As money continues to get tighter and tighter for the
average family, many “extras” are being cut to make room in the budget for the
necessities. One item that some people may consider overlooking is insurance.
Life and health insurance may seem like an unnecessary expense when they are
not being used, but rest assured that there are very important and sound
financial investments.
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The Importance of Life Insurance
Life insurance is one of those things you hope you never
use, but need nonetheless. Life insurance is insurance that pays a benefit to
your designated beneficiaries if you die while the coverage is in place. The
money can be use to pay your funeral expenses, which average close to $10,000,
and then help your beneficiaries maintain their normal quality of life if they
depended on your income.
For instance, if you are married and have children at home,
your death would greatly impact your family. Not only would they be left paying
the thousands of dollars due for your funeral, but they would also suddenly be
without your income. They could lose their home, car, and other valuable
possessions, just trying to make ends meet.
If, however, you have life insurance, your family will have
a way to pay your funeral expenses. They may also be able to pay off their
mortgage, and then put the rest of the money into a fund to grow over time,
thus allowing them to have some income off of the interest. Your life insurance
policy could also ensure that your children are able to attend college some
day.
You may be thinking that you are young and healthy, so there
is no need to buy life insurance. You may even be single, so your family is not
a concern. This is the best time to buy life insurance, however, because your
premiums are going to be quite low. Your age and health are factors that
determine how much your premiums cost, so the younger and healthier you are,
the less you will pay for a life insurance policy.
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The Need for Health Insurance
Health insurance is not cheap, and many people feel they can
get by without it. After all, they are going to be paying out of pocket for
many of their medical bills anyways, because most policies have deductibles and
co-pays. Health insurance, like life insurance, is one of those products that
you do not realize the need for until it is too late.
Health insurance may help with day-to-day medical expenses,
such as checkups and vaccinations, but many policies are designed more to help
with catastrophic illnesses or injuries. If you are suddenly diagnosed with
cancer or some other life-threatening illness, having health insurance is the
only way to ensure that you will be able to access the treatment that you need.
Without health insurance, you will have to pay out of your own pocket for your
treatment, and some hospitals and doctors will demand a portion of the payment
upfront.
Another reason that you need health insurance, even if you
pay a high deductible and end up paying many of your medical bills yourself, is
the fact that you will pay less for medical care if you are insured. Health
insurance companies negotiate discounts with medical providers that you cannot
receive if you are not insured.
Article Source: http://EzineArticles.com/1777068
