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Is life insurance a waste of money?

January 5, 2021 9:33 am

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Low cost life insurance may be beneficial to some people, and it also may be seen as a sincere and caring action to take out life insurance so loved ones can be looked after, but it can also be seen as a waste of money. The money paid for the policy can be put to better use, especially because life insurance has a very specific time frame and pay- out may not occur if the policy guidelines are not met, resulting in a waste of money.

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Life insurance may not be the best option if you don’t have kids or a mortgage. There would not be much to support after death if there aren’t any kids to look after or a mortgage to pay off.

Furthermore, buying life insurance for children can be considered a waste of money, mainly because they may not provide any financial value. Life insurance is bought primarily to provide financial support for the rest of the family or loved ones if an earner dies. Since children tend to not bring in any money, the parent’s income would stay the same, but their expenses would decrease, if anything. It is also less likely for a child in their youth to die before the parent so the odds of the policy paying out are very low.

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A parent may be better off putting money into a savings account for their child or children, to be used as emergency funds or to pay for future expenses such as education or weddings.

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