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Insurance is a contract of indemnity ie. The insurer agrees to pay the insured a certain sum of money either on the happening or the non-happening of a certain event.

Insurance is an important step in the financial planning process. It is a defensive measure and offers peace of mind to the individual.

WHY Life Insurance is Important.(Term Life Insurance)

"The Value of Life Insurance"

Some people may think of life insurance as just another expense. The question you need to consider is would someone in your life suffer an economic hardship if you were to die? If your answer is yes, then life insurance is important for you to have

Married with children

If you're married and have young children at home who depend on your income, you have a clear need for life insurance. If you were to die, the loss of your income could cause an immediate financial hardship. Not only would this make it harder for your family to make ends meet, but for them to realize future goals such as a college education. Even if one spouse is a stay at home parent and doesn't bring in a formal paycheck, his or her death means that the surviving spouse will have additional expenses such as child care, cooking, and housekeeping - all necessary services for running a household.

Married without children or singles

Why is life insurance important if you don't have children or a spouse? Just because you don't have children or are married, doesn't necessarily mean that you don't need life insurance. If your spouse or significant other depends on your income to keep the bills paid and to run the household together as a joint venture, then having the financial safety net of a life insurance policy is vital. And whether you're married or living the single life, who is going to pay the costs associated with your final expenses? Things such as funeral costs and jointly held debt (such as a cosigner on a loan) are just a few of the costs that you'll need to consider in the event you were to unexpectedly die. Unless you already have sufficient financial resources to cover these expenses, your survivors will most likely need life insurance to help pay for it all.

Having enough life insurance is just as important

The loss of a loved one is an emotional and traumatic experience for any family. But not having enough money to meet immediate and ongoing living expenses, can make a very difficult situation even worse. Not only are the people you love grieving your loss, but they'll now have added financial stresses to cope with. Depending on their current financial resources and ability to get back on their feet both emotionally and financially, your loved ones could be forced to move to a less expensive home or community, forego education and career plans, and cut back on their quality of life. They may be even forced to take out loans to pay for your funeral and burial costs, as well as any outstanding medical or tax bills.