If someone depends on you financially, chances are you need life insurance. Life Insurance provides cash to your family after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like daily living expenses, mortgage payments and college savings. What's more, there is generally no federal income tax on life insurance benefits.
It is not a pleasant thought, but if you died today, what burdens would you place on those you leave behind? The loss of your income may put your husband or wife in a position where they have to sell the assets you've worked so hard together to own. Life insurance can help relieve some of that burden so that your beneficiaries can continue to live the same lifestyle.
There are several types of insurance available to you and there are also many different endorsements and riders that you can purchase to make your coverage work best for you. It can be confusing. We can provide you with help in understanding the benefits of each and find the right policy for your needs.
Two basic types of life insurance are:
- Term Insurance is a cost effective way to provide a given death benefit to your survivors. Term offers protection for a specific period of time, flexibility to renew or convert to whole life insurance, low initial premium, and rise in premium with each new term. These policies typically do not have any cash value.
- Whole Life is sometimes referred to as Traditional or Permanent Life Insurance. This type offers permanent protection and is a good investment if you're interested in guaranteeing that your survivors will receive benefits. These policies not only pay death benefit, but also generate cash value which can be used to help fund retirement or college.
Some situations which may give you reason to explore purchasing life insurance are:
- Getting married
- Having a child
- Buying a home
- Buying a car
- Obtaining a bank loan
- Funding payment of estate taxes
- Planning for retirement
- Saving for college
- Investing in a business
- Funding a buy-sell agreement
You may also be surprised to know how much the average funeral costs today. It may cost your family at least 10,000 to give you a proper burial. Coping with the loss of a family member is hard, but if you haven't planned ahead, the cost of your burial can be overwhelming.
Owning life insurance can help give you peace of mind knowing that you've left your family with a sound financial future.
