life insurance

The Top 10 Reasons You Should Buy Life Insurance

Although life insurance is something that almost everyone needs, it’s one of the few things that most people have. When you are young and healthy, it is easy to delay purchasing a policy. The longer you wait the more likely it is that something will happen before you have coverage. Perhaps purchasing life insurance was on your list for some time but you haven’t yet made the decision to do it. These are 10 reasons you shouldn’t wait.

A financial advisor can help you create an estate plan for your family.

1. Replace Lost Income

The purpose of life insurance is to provide financial security for your loved ones upon your death. Consider what your loved ones would do if you died suddenly. This is particularly true if your loved ones depend solely on your income. Make sure you have adequate coverage. This will ensure that your loved ones are not left without a roof when you have to pay the monthly bills.

2. Indemnify Burial Expenses

Even a simple funeral can cost several thousand dollars. Although it is possible to prepay your funeral you don’t usually think about that much. Prepayment can help ensure that your loved ones are taken care of after your death. Pre-payment comes with risks. Life insurance can provide you and your beneficiaries with more assurance, which will help to ease the burden on them.

3. Repay your debt

Your debts may not disappear just because you pass away. If you and your spouse co-signed for a mortgage, or any other loan, your spouse could be responsible for the repayment. Other outcomes could lead to creditors trying to collect on your estate. This will eliminate your debts but your heirs can still receive the remaining amount. Life insurance is a way for your heirs to pay any financial obligations that may remain.

4. College Planning

There are many ways to save money on your child’s education. A life insurance policy might seem like a good option. Insurance payouts can be a great way to supplement your savings. The insurance proceeds can also be used to pay off student loans if your child borrows money to attend school.

5. Increase cash value

Term insurance is a type life insurance that stays in effect for a certain period. Whole life insurance provides permanent coverage and can be cancelled at any time. Whole-life insurance lets you build up cash value over time. This is a great option for anyone. This cash value can be used as an additional cushion you can access at any time. This could be useful if you need to cover a financial emergency.

6. Diversify your investments

You can also use life insurance to invest with universal live policies. These policies are tied to specific investment products. Policyholders then receive dividend payments depending on the product’s performance. You should read all the fine print before you jump into this type insurance. This will allow you to understand the risks and potential returns before you make a commitment.

7. Business Planning

It is essential to have life insurance if you own a business. It covers all your obligations, so that your hard work does not go unpaid. Do you have a partner? Both of you should have coverage. This way, you can be sure that if one of your spouses dies, the other doesn’t have to pay the financial burden.

8. Estate Taxes

Estate and inheritance taxes are often imposed on the heirs of someone who dies. A life insurance policy can cover the additional costs of tax bills for your loved ones if you are concerned about them.

9. Affordable coverage

People often use cost as an excuse for not purchasing life insurance. Often, coverage is quite affordable for most people. Term life is generally less expensive than universal or whole life. Your premiums will also be lower if you are younger and more healthy. You could get coverage starting at $1 per day if you don’t smoke or have a pre-existing condition. Compare policies to find affordable options.

10. Peace of mind

Nobody can predict the future. Life insurance can help you and your family prepare for every eventuality. Even if you only have a small policy you might find that you are able to sleep a bit better at night knowing your family is covered in case of an emergency.

Bottom Line

Life insurance can be a financial buffer in the event of a death. It is up to you to decide whether or not you want life insurance. It can be beneficial for your family if your income is dependent on it.

Tips to Get Life Insurance

  • An financial advisor will guide you through the process of obtaining life insurance. SmartAsset’s free tool matches up to three local financial advisors. You can then interview the advisors to determine which one is best for you. Get started now if you are ready to find an advisor that can help you reach your financial goals.
  • Here’s a list of life insurance rates if you are convinced you need it.

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