You have been an excellent provider for your family. You have a good job, a nice home, and even take a few weeks each year for a well-earned vacation. But as unpleasant as it is to think about, will your family be able to continue living at the standard they are used to? Will you passing negatively affect them financially. Maybe it’s time to think about life insurance.
Choosing the right type and amount of life insurance is key to a sound financial plan for many people—but how can you determine whether you need it? The Insurance Information Institute (www.iii.org) offers these reasons for obtaining life insurance
– If people depend on your income, life insurance can replace that income for them if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially.
– Life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.
– Even if you have no other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries.
– Life insurance benefits can pay estate taxes so that your heirs will not have to liquidate other assets or take a smaller inheritance.
– Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner’s request.
“Because there are many options when it comes to purchasing life insurance,” said Michael Barry, the I.I.I.’s vice president for Media Relations, “it is important that consumers work with an insurance professional who can explain the various types of life insurance policies—and make sure they get the best coverage for their specific needs and budget.”
That’s good advice.