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 likely financial loss or burden should a death occur to the insured.
There are many different types of life insurance as we know it and your reasons for buying 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 Insurance, Burial Insurance, Funeral Insurance, and Pre-need Insurance. The basic premise behind life insurance is to provide monetarily for others in your absence.
We all have certain financial commitments that we have or need to meet throught out the course of our lives, commitments that we contribute monetarily to in some form or another. These contributions in many cases are not just focused upon your family’s income or welfare. In fact, the death benefits of a life insurance policy may also be used to support any business interests you may have, a favorite charity, or even be used to contribute to your local community of interest.
Personal financial obligations should include your family’s lifestyle, hosue payments, medical bills, credit card debt, car loans, college loan expenses, and funeral expenses.
Business financial commitments should include providing the essential 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 charities are properly met, and others even remember their church with a percentage of their policy proceeds.
How much life insurance a person should have should vary depending on the lifestyle your family is accustomed to, the financial needs of your family and others, the sources of that salary, the amount of debts incurred, and the number of dependants who will require support.
Many life insurance agents would recommend that you have a life insurance policy, or policies, that would add up to five to ten times of your annual salary. However, it is best to sit down with a financial planning expert and go through the reasons why you should consider buying life insurance, the proper dollar amount of benefits you should buy, and what form of insurance planning should best meet the need of you and your beneficiaries.
Life insurance is a very significant 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 need to buy a life insurance policy.
1. Life insurance properly planned will provide the necessary money 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 ingredient 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 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 situation, and your long term goals.