Top 5 Reasons to Buy Life Insurance

Most consumers shouldn't go without life insurance. Here's why.

Most people should have life insurance in place -- even if they don't know it.

While it may not be fun to think about buying a policy that pays out after a death, there are many reasons why this kind of coverage should be a top financial priority when preparing for the future.

Not convinced? Here are five big reasons to buy life insurance ASAP for anyone who doesn't have a plan in place already.

1. It provides crucial protection for loved ones

No one wants to leave their dependents in the lurch. Unfortunately, that's exactly what could happen if an untimely death occurs. Anyone who has loved ones who rely on their income or the services they provide needs to make sure life insurance is in place so their family members don't end up with insurmountable financial problems after a death.

2. It replaces lost income

Many people build shared lives with people who depend on them for income. For example, a person who is married may have a joint mortgage with a spouse that relies on both incomes to pay. Or someone who has children will obviously plan on providing them with financial support.

Obviously, if a person dies while still working, their income will stop coming. Life insurance can provide money to replace that missed income so the bills can still be paid.

3. It covers funeral expenses

Funerals are extremely expensive, often costing thousands of dollars even for a simple affair. Without life insurance, surviving family members could be on the hook for covering these costs. This could lead them into debt or create financial struggles as there is often tremendous pressure to provide a generous final farewell.

Life insurance can cover the costs of burial and other funeral-related expenses to ensure survivors aren't put on the spot and asked to come up with money they may not have available.

4. It enables debt payoff

Many people take on debts during their lifetimes. In some cases, those debts are forgiven if there's no money to pay them. But if there's joint debt -- such as a shared mortgage -- or if the deceased had anyone cosign for loans they took out, then the debt has to be paid off.

Creditors can also come after the estate and try to take assets the deceased would prefer to leave to loved ones. And any secured debts, such as a car loan or mortgage, would have to be paid in order for heirs to keep the asset the debt is tied to.

A life insurance policy can provide the funds to repay any outstanding loan balances so the deceased can fulfill obligations to creditors and ensure there are plenty of estate assets left over for heirs.

5. It's affordable

Finally, purchasing life insurance makes sense because it's an affordable type of protection -- especially if a policy is purchased while young and healthy. The peace of mind and crucial financial security a term life insurance policy offers is well worth the small monthly premiums.

For all of these reasons, consumers who do not already have a life insurance policy in place should seriously consider getting covered as soon as possible.