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Simple Reasons to Purchase Life Insurance

Christopher James


People often ask "What is life insurance?" and why they should purchase it. Life insurance, also known as a living benefit or guaranteed acceptance life insurance policy, is a contract that provides an individual or family with financial protection against the untimely death of the insured. In this article will explore the reasons for purchasing life insurance. 

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Reasons For Life Insurance

There are required components of your financial plan—like purchasing term life insurance—that you should not procrastinate on purchasing. In fact, many experienced financial planners consider life insurance to be the cornerstone of financial planning, due to the fact it is the most effective way to protect against a loss of income from the unexpected passing of a loved one.

In addition to the peace of mind that life insurance can provide, it is also important to note that the longer you wait to buy life insurance, the higher your monthly premiums can be. Age is one of the most important factors life insurance underwriters will consider, which is why someone who is 35 can expect to pay less per month than someone who is 45, or older. (Factors like current health, family health history, height/weight, and lifestyle also play a big role).

Life Insurance Can Help You Save

The sooner you choose to purchase a life insurance policy, the less you will need to pay each month for coverage. This is because one of the most important factors that underwriters will consider is your age. People who are younger can secure the lowest monthly premiums available—in other words, the longer you wait to get a life insurance policy, the more you will have to end up paying.

Additionally, if you choose to get a life insurance policy that has a cash value, such as a whole life insurance policy, purchasing sooner will give you more time to accumulate wealth. In the later years of your policy, in particular, this can make a major difference since the cash can cover premium costs or be used for immediate cash needs.

Increased Health Risks

As of December 1, 2021, approximately 777,000 Americans have, tragically, passed away from COVID-19. New variants, such as the omicron variant, continue to emerge, making it unclear when the pandemic will fully end, and things will return to normal. Due to the pandemic, along with other factors, the life expectancy of the average American has declined by nearly two years since 2019 (dropping from about 80.5 to 78.5)—this is the largest drop in the nation’s recorded history.

When public health risks are higher, investing in a life insurance policy becomes even more important. And if you are generally healthy, the monthly cost of purchasing a term life insurance policy is likely much lower than you’d initially assume.


Diversifying your financial commitments will be one of the best ways for you to establish long-term financial security. Putting all of your wealth into a single asset—whether it is real estate, the stock market, or anything else—will increase your exposure to asset-specific risk.

If the intrinsic value of an investment is its ability to generate future income, then it seems that your own life is the first “investment” you’d want to insure—after all, your ability to generate income for your family makes your life more valuable than other insurable investments, such as your car or even your home. So, if the goal of your broader investment strategy is to create future financial security, then life insurance must be a part of your overall portfolio.

Peace of Mind

Life is full of unpredictable events—no matter what the future has in store, it will continue to be unpredictable. And it’s these unpredictable components of our lives that often keep us up at night.


Life Insurance is what helps us know that even if these “what ifs” actually unfold, we’ll still be okay. Life insurance, in particular, provides you with the peace of mind that even in the worst-case future scenarios, your dependents will be protected. It is the ultimate security blanket, both in good times and in bad.