Reasons Why You Need Life Insurance
Just as a surprise may put your life in danger, protecting your life can save it. As you make decisions about what is going to happen with your family, loved ones, and bills after your death, life insurance can help avoid the gap that would otherwise have to be filled by other people or organizations. With the cost of protecting one person now skyrocketing in America and across the world, it pays to get insured against death from any number of causes and sources before you need it.
The answer to the question "Why do you need life insurance?" can be based on a number of factors. For someone in his or her 20s, the answers may be different than those of a person in his or her 60s, but no matter what the age, it's important to understand what one really needs life insurance for and why it should be considered.
For the financial planner, life insurance can help older clients with retirement planning by allowing them to manage their risk until they must claim on their policy. At that time, annuities or income guarantees can help ensure that money is available when needed for living expenses throughout a person's entire lifetime.
For a start-up business, life insurance can transfer the business to new owners while paying for the owners' funeral costs. In that way, a new business can continue even after death.
For an individual who has children under 18 or face a large tax bill that will be affected by his or her death, life insurance can help those left behind by providing them with money for living expenses in the meantime.
In addition, there are many different types of situations where life insurance makes sense if you are trying to manage financial risk over time. By investing in longer term policies with interest rates adjusted over time like Universal Life or Whole Life Insurance policies, you can invest money in policy that earns interest and pay premiums.
Taking out a universal life insurance policy can help you pay off your mortgage faster, or invest in a retirement account that will pay more interest than you could for yourself. Having done this, the money can grow for your heirs after your death if they are able to sell it. This is called "pre-funding" and can be very important if you want to leave a significant amount of inheritance to grandkids, grandchildren, or other family members.
In addition, there are many reasons why life insurance works well when investing in alternate investment vehicles like real estate investment trusts (REITs). Real estate has been proven as an excellent holding asset during economic times like we have recently experienced. But securing a property to ensure that you own it forever, and have it occupied by tenants who will pay income tax on it in your name, requires an investor willing to make a significant down payment. A $250,000 purchase can mean thousands of dollars in down payment and security deposits. Life insurance can offer the leverage needed for these types of real estate investing endeavors without losing sleep over how the investment is doing while you are sleeping.
Even if none of these reasons apply to a person's particular situation or circumstance, having life insurance is still important for many Americans. This is because life insurance can provide benefits like lump sum payouts that can be used for any special needs a person may have after his or her death. From a child's braces to a college education, buying life insurance can be crucial for people who don't have the means to pay for any special needs without help from their families.
In addition, if a person dies young, life insurance can replace income before retirement in the form of monthly payments for as long as funds are needed. Life insurance is one of the few financial products that can guarantee an income before death, and is therefore very important in planning out how much money will be available after death to make sure all family obligations are met.
Even when a person doesn't have any financial needs to consider at all, it's still important for many people to carry life insurance for basic coverage reasons. This is because many policies will pay out a lump sum payout in the event of certain forms of death while also protecting the policy holder from debts that will accrue after death. For example, if a person has multiple policies, his/her premiums will be lower since the policies are combined. Combined with a few other financial products like an annuity, this can help ensure that no matter what happens, a person's estate is taken care of so he or she won't leave his/her family in financial need.
Finally, life insurance can also be left as part of a will to ensure that funds can go to family members even if there are legal complications. For example, if a person has many debts and no money to pay them off, the death benefit can help pay off these debts in some cases. It is important to discuss this further with your attorney if you are interested before choosing how and when life insurance will be left for family members.
Life insurance can help you plan for both emergencies and long term goals. In many cases, it is smart to carry life insurance whether you need it or not just so that you know it's there when you do need it. Using a comparison site like InsuranceQuotes.com to find the best rates available in your area, you can make sure that your family is protected for years to come. For many families today, it is one of the most fulfilling forms of financial protection and security you can provide.
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The same is true for anyone fighting a terminal illness or disease which ultimately causes his or her death.