Why should I buy life insurance?
You may be asking yourself, why should I buy life insurance? Do I need to buy life insurance? Financial experts consider life insurance to be the foundation of good long term financial planning. Even if you don’t have kids or think life insurance is an unnecessary expense, it may be in your best interest to consider life insurance. Below are 5 great reasons you should consider buying life insurance, even if you don’t have a family!
1) Mortgage Protection
If you live with a spouse or significant other, you should consider purchasing life insurance as mortgage protection. If the worst were to happen, you wouldn’t want the ones you cared about to be left homeless. Life insurance can be used to pay off an outstanding mortgage balance. Several companies offer what is called “decreasing term insurance,” which means the death benefit slowly decreases at the same rate as your mortgage balance.
2) Replacement Income for your Dependent
If you have kids, or others that depend on your income, life insurance can allow them to continue to live without having to worry about debt, paying the bills, or having to go out and get a job. This usually occurs if you have children, but can also happen if you have parents, siblings, or elderly members of your family you have to take care of and rely on you financially. You can avoid dependents having their standard of living lowered by purchasing life insurance.
3) Paying Final Expenses
Life insurance is most often used to cover your funeral and burial costs. Some states have estate taxes and probate costs, while others charge debts and medical expenses to your next of kin. Life insurance can cover your federal ‘death’ tax or a local state “death” tax. Federal “death” taxes are changing at the beginning of 2011, but some states are proposing increases in their state “death” taxes. Life insurance can be purchased to plan for these final expenses. Life insurance is available in many amounts, so you can find a death benefit that meets your specific needs.
4) Creating an Inheritance for your Heirs
Some people choose to purchase life insurance so they will have something they can pass to their heirs by naming them as beneficiaries of the life insurance policy. Others purchase life insurance even when they don’t have heirs to make significant charitable contributions after they pass away. You can pay for college for your children and prepare for it–even if you are not there to see it.
5) Creating a Source of Savings
Many life insurance policies create a cash value that, when not paid out as a death benefit, can be withdrawn or used as equity to borrow against at the policy holder’s request. Many people place their life insurance policy as a high priority among their bills which allows buying a cash value policy to create a savings plan. The interest credited from this method is also tax deferred and tax exempt if they money is paid as a death claim.
Life insurance is extremely unique because it can be a wonderful tool for personal protection and accumulation of wealth. While all policies provide a death benefit, many can be used as a source of retirement income, paying for a child’s college, or as a source of cash in an emergency. You can get double benefits from buying life insurance: financial security and peace of mind. So you may be starting to see the need for life insurance in your life. Don’t put it off! Get free quotes today.