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Top 10 Reasons To Buy Life Insurance

Life Insurance

Buying life insurance is an important step in financial planning. Read on for the top 10 reasons to buy life insurance.

  1. The younger you are, the less expensive it is The time to buy life insurance is when you are young. The younger you are when you purchase a policy, the more affordable that policy is. If you are young and single, buying life insurance may not seem like the best investment- however, you can lock in a better deal for life, and thus won't have to buy a more expensive policy when you are older, married and have a spouse or children depending on you.
  2. Life insurance is affordable- Life insurance is a very affordable way to protect your family. For a few hundred dollars per year, you can get a few hundred thousand dollars in coverage.
  3. Life insurance allows you to protect your dependents: If something happens to you, those who are depending on your income may face serious financial hardship. Life insurance allows you to protect them from that fate. Your insurance can pay off your mortgage, pay for your child's college tuition or give your spouse or children something to live on, should you suffer an untimely death.
  4. Life insurance helps ensure financial security: If your dependents know they will receive a death benefit if something happens to you, then it helps them to feel financially secure.
  5. Life insurance can pay for your funeral: Funerals are expensive- several thousand dollars. If you do not have a life insurance policy, your family will have to pay from your funeral from the money you leave them, or worse- pay out of their own pockets if you don't leave any money behind.
  6. Life insurance provides forced savings If you buy a whole life policy, you pay higher premiums each month than it costs to insure you. This extra money is invested and the policy accrues a cash value. You can then borrow against the policy, sell it or draw income from it.
  7. Life insurance provides a tax-free inheritances: Your beneficiaries do not pay taxes on the death benefit that they receive upon your death.
  8. Life insurance allows for tax-free investing: Money you invest in a whole life policy is not taxed and grows tax free until you take it out. If you borrow against the policy, then you may never have to pay taxes on those investments although you will still be able to access income from them.
  9. Life insurance allows you to leave an estate: Even if you have no money to leave to your spouse or children, if you have a life insurance with a death benefit, they can receive money upon your death to help them survive financially or accomplish their goals once you are no longer around to provide for them.
  10. Life insurance allows you to protect your legacy: If you have a large estate, your heirs may face estate taxes or inheritance taxes. If they don't have the money to pay those taxes, they could be forced to sell items from the estate to raise the money. If you have a life insurance policy and your heirs receive a death benefit tax free, they can use this money to pay for the estate taxes. This allows them to keep your estate in tact.

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