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Life Insurance, Five Reasons Why You Need It

Life insurance is a financial tool, that when properly used will help to preserve the lifestyle of our family and friends that we will leave behind.

Author: Ralph Thomas
Date: Jun 2, 2010 - 2:14:03 PM

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Life insurance is a financial tool designed to help protect a person’s family, loved ones, or most any business entity that may suffer a potential financial loss or burden should a death occur to the insured.

 

There are many different forms of life insurance as we know it and your reasons for purchasing life insurance coverage is only limited by your imagination.

 

Some of these forms of insurance include; Term Life Insurance, Whole Life Insurance, Universal Life Insurance, Final Expense Life Insurance, Burial Insurance, Funeral Insurance, and Pre-need Insurance. The basic premise of life insurance is to provide financially for others in your absence.

 

We all have certain financial commitments that we have or need to meet throughout our lives, commitments that we contribute monetarily to in some way or another. These contributions in many cases are not just limited to your family’s income or wellbeing. In fact, the proceeds of a life insurance policy can also be used to support any business interests you may have, a favorite charity, or even be used to help your local community.

 

Personal financial obligations could include your family’s lifestyle, mortgage payments, medical bills, credit card debt, car loans, college expenses, and funeral expenses.

 

Business financial obligations may include providing the necessary funds to buy out a business partner’s family upon a partner’s death, used to ensure that your vision and direction needed by your favorite charity are properly met, and many even remember their church with a percentage of the death benefits.

 

How much life insurance a person should have would vary depending on the lifestyle your family is accustomed to, the financial needs of your family and others, the sources of that income, the amount of debts incurred, and the number of dependants who will require support.

 

Many insurance agents would recommend that you have a life insurance policy, or policies, that would amount to five to ten times of your annual income. However, it is best to sit down with a financial planning expert and go through the reasons why you should consider purchasing life insurance, the proper dollar amount of benefits you should purchase, and what form of insurance planning would best benefit you and your beneficiaries.

 

Life insurance is a very important part of any future financial planning, and provides your family and loved ones with a certain peace-of-mind, knowing they are financially protected.

 

Here are just five of the many great reasons why you should purchase a life insurance policy.

 

1. Life insurance properly planned will provide the necessary funds to deal with your financial obligations. It offers protection for your family and loved ones left behind.

 

2. Provides, in most cases, a tax free cash benefit that can be used to pay any possible estate taxes.

 

3. Life insurance can have a pension or savings component that provides funds necessary for you during retirement. Yes, even you can benefit from life insurance while you’re alive.

 

4. Some policies can have coverage riders like critical illness payments or guaranteed term insurance for your children or spouse. This will vary from policy to policy; eligibility and requirements must be met.

 

5. A life insurance policy is considered a financial asset which may improve your credit score when applying for a home mortgage loan or business loan.

 

Life insurance is vital key to any good financial planning, and the amount of coverage you should purchase will depend on your current financial obligations, and your long term commitments.

For more information please visit us at www.finalexpensestore.com

View all articles by Ralph Thomas

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