When to Consider Life Insurance

Many people feel that life insurance is something they don’t need or can’t afford. In reality, almost everyone needs this coverage at some stage of their lives, and, according to the research organization LIMRA, 80% of consumers overestimate the cost of coverage.

WHO NEEDS LIFE INSURANCE?

How do you know whether you need life insurance? Ask yourself the following question:

If something were to happen to me tomorrow, could my family:

• Replace lost income
• Cover burial expenses
• Pay off mortgage/debt
• Cover college tuition
• Cover estate taxes
• Financially sustain their current lifestyle

If you are unable to answer “yes” to every point, you should consider buying insurance. Almost 9 in 10 Americans agree that most people need life insurance, yet only 60% say they have it.

WHAT BENEFITS DOES LIFE INSURANCE PROVIDE?

There are many types of this insurance, but for all of them the bottom line is the same: They pay cash to your family after you die, allowing loved ones to remain financially secure.

In addition, payments can be used to cover daily living expenses, mortgage payments, outstanding loans, college tuition and other essential expenses. And, finally, the death benefit proceeds of a life insurance policy are almost never subject to federal income taxes.

If you’ve worked hard to establish a solid financial framework for your family — including investments, home equity, a savings plan, retirement accounts — life insurance is the foundation upon which it all rests. It can guard against the need for your loved ones to make drastic changes to future plans when you die. Certain types of insurance also have a built-in cash-accumulation feature that can help you reach savings goals.

Here are some examples of specific life stages or life events that might trigger the need for life insurance:

• Getting married
• Becoming a parent
• Purchasing a home
• Changing jobs
• Retiring or planning for retirement

If someone depends on you financially, you might need life insurance.