Life insurance is the vehicle that will alleviate the financial burden left behind when you die. Life insurance provides cash to your family after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding. Most death benefits are paid without federal income tax obligations. Income-tax-free money.
Essentially we are all candidates for life insurance. To figure out if you need life insurance, you need to think through the worst-case scenario. If you died tomorrow, would your loved ones be financially stable? Would your loved ones be in a financial position to pay for your final expenses? (e.g., funeral costs, medical bills, taxes, debts, lawyers' fees, etc.)? Would they be able to cover ongoing living expenses like the rent or mortgage, food, clothing, transportation costs, healthcare, etc? What about long-range financial goals? Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably?
The reality is, losing a loved one is always a challenge. Your emotional devastation does not need to be burdened even more by financial difficulties. Life insurance helps make sure that the people you care about will be provided for financially, even if you're physically not there to look after them yourself.
Whether you're young or old, married or single, have children or don't, take a moment to consider how life insurance might fit into your financial goals.
Essentially we are all candidates for life insurance. To figure out if you need life insurance, you need to think through the worst-case scenario. If you died tomorrow, would your loved ones be financially stable? Would your loved ones be in a financial position to pay for your final expenses? (e.g., funeral costs, medical bills, taxes, debts, lawyers' fees, etc.)? Would they be able to cover ongoing living expenses like the rent or mortgage, food, clothing, transportation costs, healthcare, etc? What about long-range financial goals? Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably?
The reality is, losing a loved one is always a challenge. Your emotional devastation does not need to be burdened even more by financial difficulties. Life insurance helps make sure that the people you care about will be provided for financially, even if you're physically not there to look after them yourself.
Whether you're young or old, married or single, have children or don't, take a moment to consider how life insurance might fit into your financial goals.
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YOU'RE MARRIED
The saying goes, "When you're married, you are one." You share everything with your spouse, including your financial obligations. Many people error in believing that they don't need to think about life insurance until they have children. This certainly is not true. What if one of you were to die tomorrow? Even with the surviving spouse's income, would that person be able to pay off debts like credit-card balances and car loans, let alone cover the monthly rent and utility bills. Mortgages are a huge financial obligation that require a large bulk of money for pay off. Many families today require income from both husband and wife. If you died suddenly, could your family maintain their standard of living on your spouse's income alone? Not likely! Life insurance allows your plans for the future to live on. |
YOU'RE A SINGLE PARENT
As a single parent, you are the caregiver, breadwinner, cook, chauffeur, and so much more. Yet, statistics show that nearly four in ten single parents have no life insurance whatsoever, and many who do have coverage say they need more than they have. With so much responsibility on your shoulders, you need to make absolutely sure that you have enough life insurance to protect the future of your children.
As a single parent, you are the caregiver, breadwinner, cook, chauffeur, and so much more. Yet, statistics show that nearly four in ten single parents have no life insurance whatsoever, and many who do have coverage say they need more than they have. With so much responsibility on your shoulders, you need to make absolutely sure that you have enough life insurance to protect the future of your children.
HOMEMAKER
Just because you don't earn a salary doesn't mean you don't make a financial contribution to your family. Childcare, transportation, cleaning, cooking and other household activities are all important tasks, the replacement value of which is often severely underestimated. Research shows the value of these services at over $40,000 per year. Could your spouse afford to pay someone for these services? With life insurance, your family can afford to make the choice that best preserves their quality of life.
Just because you don't earn a salary doesn't mean you don't make a financial contribution to your family. Childcare, transportation, cleaning, cooking and other household activities are all important tasks, the replacement value of which is often severely underestimated. Research shows the value of these services at over $40,000 per year. Could your spouse afford to pay someone for these services? With life insurance, your family can afford to make the choice that best preserves their quality of life.
YOU HAVE GROWN CHILDREN
You may feel your need for life insurance has passed as time goes by. But just because the kids are through college and the mortgage is paid off doesn't necessarily mean that Social Security and your savings will take care of your future. If you died today, your husband or wife will still be faced with daily living expenses. What if your spouse outlives you by 10, or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren? Did you know that depending on the size of your estate, your heirs could be hit with a large estate tax payment after you die (45% of your estate). The proceeds of a life insurance policy are payable immediately, allowing heirs to take care of estate taxes, funeral costs, and other debts without having to hastily liquidate other assets, often at a fraction of their true value. And life insurance proceeds are generally income tax free and can be arranged to avoid probate.
You may feel your need for life insurance has passed as time goes by. But just because the kids are through college and the mortgage is paid off doesn't necessarily mean that Social Security and your savings will take care of your future. If you died today, your husband or wife will still be faced with daily living expenses. What if your spouse outlives you by 10, or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren? Did you know that depending on the size of your estate, your heirs could be hit with a large estate tax payment after you die (45% of your estate). The proceeds of a life insurance policy are payable immediately, allowing heirs to take care of estate taxes, funeral costs, and other debts without having to hastily liquidate other assets, often at a fraction of their true value. And life insurance proceeds are generally income tax free and can be arranged to avoid probate.
YOU OWN A BUSINESS
Besides taking care of your family, life insurance can also protect your business. What would happen to your business if you, one of the owners, or perhaps a key employee, died tomorrow? Life insurance can help in many ways. For instance, a life insurance policy can be structured to fund a "buy-sell" agreement. This would ensure that the remaining business owners have the money to buy the company interests of a deceased owner. That way, the owners get the business and the family gets the money. To protect a business in case of the death of a key employee, "key person insurance," payable to the company, provides the owners with the financial flexibility needed to either hire a replacement or work out an alternative arrangement.
Besides taking care of your family, life insurance can also protect your business. What would happen to your business if you, one of the owners, or perhaps a key employee, died tomorrow? Life insurance can help in many ways. For instance, a life insurance policy can be structured to fund a "buy-sell" agreement. This would ensure that the remaining business owners have the money to buy the company interests of a deceased owner. That way, the owners get the business and the family gets the money. To protect a business in case of the death of a key employee, "key person insurance," payable to the company, provides the owners with the financial flexibility needed to either hire a replacement or work out an alternative arrangement.
SINGLE
Most single individuals don't need life insurance because no one depends on them financially. But there are exceptions. For instance, some single people provide financial support for aging parents or siblings. Others may be carrying significant debt that they wouldn't want to pass on to family members who survive them. Insurability is another reason to consider life insurance when you're single. If you’re young, healthy and have a good family health history, your insurability is at its peak and you’ll be rewarded with the best rates on life insurance. Living benefits in current day plans allow for individuals to make use of riders on the policy that could be exercised in other instances outside of death. Policies now have disability riders, critical illness riders, and other benefits that can be advantageous to individuals looking for more than just a simple life insurance plan.
Most single individuals don't need life insurance because no one depends on them financially. But there are exceptions. For instance, some single people provide financial support for aging parents or siblings. Others may be carrying significant debt that they wouldn't want to pass on to family members who survive them. Insurability is another reason to consider life insurance when you're single. If you’re young, healthy and have a good family health history, your insurability is at its peak and you’ll be rewarded with the best rates on life insurance. Living benefits in current day plans allow for individuals to make use of riders on the policy that could be exercised in other instances outside of death. Policies now have disability riders, critical illness riders, and other benefits that can be advantageous to individuals looking for more than just a simple life insurance plan.