REASONS WHY PEOPLE SHOULD CONSIDER BUYING LIFE INSURANCE
For a lot of people, they acquire their life insurance from a friend or acquaintance selling it to them and not buying it. There are many reasons why people should consider buying a life insurance. It is a fundamental and indispensable to a sound financial plan. It will give you a peace of mind knowing that money would be available to protect your estate and family in numerous ways.
Here are reasons to buy a life insurance.
- It will pay final expenses.
A funeral and burial cost can easily run up to tens of thousands of dollars and you don’t want your partner, children or parents to financially suffer in addition to the emotionally stress they are experiencing because of your death.
- It will cover your children’s expenses.
Like most parent, you want to make sure that your kids are well taken care off and will be able to afford a quality college education. For this reason alone, an additional coverage is very important while your kids are still at home.
- It can replace your spouse’s income.
If your spouse had passed away while your kids are still young, you would need to replace her income, which is vital to your lifestyle. You would also need to hire a help for domestic tasks you shared such as cleaning the house, cooking, laundry, carting kids to a visit to the doctor and helping with schoolwork.
- It will help pay off debts.
In addition to providing you with income to cover your day to day living expenses, your family would need insurance to cover any debts you have such as mortgage so that they will not have to sell your home to stay solvent.
- To buy your business partner’s shares if you own a business.
If you’re involved in a business partnership, you will need an insurance for your partner’s life. The reason for this is, if in case he dies, you will have enough cast to purchase his interest from this heirs and pay his share of your company’s obligations without having to sell the company itself.
- To pay off estate taxes.
Estate taxes can be really steep, so getting an insurance in place to pay them is vital to avoid jeopardizing your fund or assets for your retirement. This use of insurance for this purpose is actually common in big estates and uses permanent insurance rather than term insurance to guarantee that the coverage will remain until the end of life.
The face amount of an insurance policy should be high enough to substitute the after-tax income you would have made had you lived a full life, presuming you can pay for the annual premiums for that amount. In other words, the insurance substitutes the income you did not have the chance to earn by living and working until retirement due to an untimely death.
The right amount of insurance lets your family to continue their lifestyle, even though your income is no longer existing. The definite amount that you should buy will depend upon your present and likely future incomes, any special circumstances affecting you or your family, and your current budget for premiums.