Life Insurance

Why do I need to purchase life Insurance?

  1. Income Replacement for loved ones 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.
  2. Final Expenses Life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.
  3. Create an inheritance for your heirs Even if you have no other assets to pass to your loved ones, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries.
  4. Pay estate taxes (death tax) Life insurance benefits can pay estate taxes so that your heirs do not have to liquidate other assets or take a smaller inheritance.
  5. Charitable contributions By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy’s premiums.
  6. Tax deferred growth Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner’s request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of “forced” savings plan. Furthermore, the interest credited is tax deferred (and in most cases tax exempt if the money is paid as a death claim).