Why Do I Need Life Insurance ?
There are many reasons for buying life insurance. If you're the primary wage earner in the family, life insurance is a good way to help provide your family with a stable financial future.
Even if you aren't the primary wage earner, it's important to consider life insurance to help cover the financial burden of childcare, funeral expenses and other unforeseen costs in the event of your death.
While it's difficult to face our own mortality, planning for it can help ease the burden our loved ones will face later. Purchasing life insurance can help make a difficult situation easier by providing death benefits for these other circumstances :
Unpaid medical bills
Income replacement for survivors
Unplanned or emergency expenses
Your mortgage balance
Future education funds for your children
Retirement income for your spouse
What Are My Life Insurance Needs ?
Life insurance can be a very important part of your overall financial plan, regardless of your stage in life.
Starting Out
This is the time when you should be considering your future financial concerns. Generally, the younger you are, the less you pay for life insurance. If you choose a term insurance policy, you'll find you can purchase a substantial amount of protection for a relatively low cost.
Marriage & Family
If you marry and/or have children, your need for life insurance may become even greater. You'll want life to go on for your loved ones should you face an untimely death. Having enough life insurance is a way to help ensure that your children will have sufficient funds for their education.
Children: The Early Years
If you purchase a life insurance policy for your child and he/she later becomes uninsurable for health reasons, there will already be insurance in force and protection for the future.
Looking Toward Retirement
At this stage in life, you may want to take advantage of the accumulated cash value from a previously established permanent policy. If at this point, you don't need the death benefit purchased previously, you may want to consider using the cash value to purchase an annuity or annuitize your policy to generate a retirement income stream.
Planning Your Estate
Life insurance traditionally has been a popular way to pass money onto your beneficiaries because generally the death benefit is free from income tax. If the policy owner is the insured, it is included in the policy owner's estate. You may want to consult a tax advisor when considering life insurance as an estate planning tool.
