What Are The Positive And Negative Things About Life Insurance?

Certainly, you have heard of the word insurance. There could be someone who offered you this service or you may have read it on the newspaper or magazine. While insurance may sound common to a lot of people, there are some facts about it that people need to know for them to fully understand its essence and the possible benefits they could get from it. However, just like a coin with two sides, insurance policies have also some disadvantages. So to help you out, this article will provide you some pros and cons of life insurance.



Ultimately, the main purpose of insurance, ever since it was developed in the early times is to provide protection to an individual or organization that avails it. In terms of life insurance, its main purpose is to provide death benefit. Facing death with no availed life insurance can create different and several types of emotional and financial issues especially for those people that have been left behind.


Another benefit that life insurance provides to people is that it can remove worries. Definitely, there are a lot of worries that an individual may experience over his or her entire life. One of the main concerns is the future of the family. As such, when a person avails life insurance, he or she no longer has to worry about the future of his or her family or for emergencies that could arrive.

Cash value

Moreover, aside from protection and worries free, another advantage of life insurance is cash value. Generally, cash value refers to the use of cash to support or fund many purchases down the road like paying off debt, buying a home or investing in a real estate. In other terms, life insurance could serve as your passive income.


Despite the benefits of life insurance, it is unavoidable that this financial instrument or protection has also some disadvantages.

Opportunity Cost

As of the moment, life insurance is known as a want and not a need in the market. This only means that people are thinking about spending the money in other things instead. If we didn’t have an insurance policy, we could wonder what other products or services we could avail.


For a lot of people, especially the young ones, understanding life insurance could be tricky. There are a lot of questions that people want to ask about life insurance. Hence, generally, if a person chooses to have life insurance at a young age, the premiums will be much lower because the risks that insurance companies are getting from you are lesser compared to older people.

Not Necessary

In this time when the global economy is not that stable, people tend to focus more on more important things rather than those that they feel they don’t need. Some people consider life insurance as not necessary. Hence, they would rather spend their money necessities that they need everyday for them to survive rather than life insurance.

Generally, as mentioned earlier, life insurance is a like a coin with two sides; positive and negative. But if we are going to take a look at life insurance on a larger scale, we can tell that its main purpose is to provide quality life and protection to people.



Julia Arostegi lives in California USA. She took Developmental Communication at the University of California and finished her studies in 2012. She is currently the managing director of California Magazine. She is also a blogger, content enthusiast and a photographer.