5 Reasons Why It's So Important To Have Life Insurance
If you sit down with a financial expert today, one of the first things they are going to recommend you purchase, if you haven’t already, is life insurance. Many financial experts consider life insurance to be the cornerstone of financial planning, and a very important tool for your future.
There are several reasons why someone may consider purchasing life insurance, and in this article, we will discuss five of the most important ones.
- Pay Your Final Expenses – One of the main reasons many people purchase life insurance is probably the most obvious. Having a life insurance policy at the time of your death means that your loved ones are not stuck with high funeral and burial costs, probate or estate costs, and perhaps costly medical debt that isn’t covered by your traditional health insurance.
- Replace Income For Your Dependents – If you are the sole earner, or a key earner in your household, then a life insurance policy could mean continued financial stability for your loved ones in the event of your untimely death. The most common cases would be if you are a parent with young children, or you are the only working member of your family. Of course, even if you do not have children, you may not wish to leave your spouse or other family members in dire straits because of your death. Insurance can be used to replace your income after you’re gone.
- Create An Inheritance For Your Heirs – Even if you have no other nameable assets, such as a home you wish to pass to your children or other heirs, a life insurance policy can be left in their name as beneficiaries, meaning that whatever is left after other named costs (funeral or medical expenses, for example), will be able to be passed to your family.
- Contribute To Charitable Causes – While many people choose to elect all of their benefits to go to their family, many people also elect to make significant charitable donations with their life insurance policy. It’s often a much larger contribution than could be made by simply donating smaller amounts over time.
- Create a Source of Savings – There are several types of life insurance that will actually create a cash value that can be borrowed throughout the policy owner’s life. Because most people will do their best to pay their premiums on time each month to ensure continued coverage, buying a cash-value type policy can create, in essence, a savings plan in which money can be withdrawn. The bonus is that the interest credited is often tax deferred.
While no one likes to think about no longer being around, as we all know death is, unfortunately an inevitability. Doing your best to ensure that your loved ones remain financially secure after your passing is a comforting feeling, and life insurance can be that security.