Where Do I Begin

Do I need life insurance?

In years past, many people were “persuaded” to purchase life insurance when a friend or acquaintance got his or her insurance license. Because of this, millions of Americans have policies that they either do not understand or will not provide the financial security their dependents need if they were to die.

The first question that should have been asked by these eager “friends” selling life insurance is, “Do you need life insurance?” Once this question is answered, then determining a length you need the coverage and the amount of coverage you truly need would have been much easier to calculate.  So let’s begin, “Do you need life insurance?”

Reasons to purchase life insurance

As we grow older, our responsibilities increase. Because of this increased responsibility and hopefully an increase in assets, we realize that life insurance is a fundamental cornerstone of a sound financial plan. Life insurance provides peace of mind knowing that money will be available to protect your family and estate in a number of ways, which include the list below. Therefore if any of these items pertain to you, then you more than likely need life insurance.

1. To Pay Final Expenses
The expense associated with death can be staggering. The cost of a funeral and burial can easily run between 10,000 and 25,000. With life insurance, you can make certain that your loved ones do not to suffer financially in addition to the emotional pain they will already have to suffer.

2. To Cover Children’s Expenses
Like any good parent, you want to make certain your kids are well taken care of and are able to afford a quality college education. This is why building a life game plan is so critical. You must give each dollar a name and have a plan of how each dollar will be spent so you are able to make certain your child(ren) are taken care of financially.

3. To Replace the Spouse’s Income
Whether your spouse is a full-time employee or works 24/7 as a stay at home mom, you will need to replace her income while you have children in the home. Losing a spouse is traumatic enough, however, this tragedy can be greatly compounded if the everyday tasks of the one you love are left up to you.  Life insurance provides you the financial ability to hire help for domestic tasks you shared like cleaning the house, laundry, cooking, helping with schoolwork, and carting kids to school, activities and doctor’s visits.

4. To Pay Off Debts
In addition to providing income to cover everyday living expenses, you need life insurance to pay off debts such as your mortgage, auto loans, credit cards, etc. Your life game plan should include all personal debts so your dependents are not left with the stress that debt can cause.

5. To Pay Off Estate Taxes
Estate taxes can be an enormous problem for family members after the loss of a loved one. This is why having a life insurance game plan designed to pay them is essential to avoiding the loss of assets or funds built for retirement. Use of insurance for this purpose is most common in large estates, and uses permanent (rather than term) insurance to ensure that coverage remains until the end of life.