Why buy life insurance? It’s important to have a plan in place to protect your loved ones in the event of your death. In fact, many financial advisors consider life insurance to be the cornerstone of sound financial planning. Not only is is a good strategy, it’s a cost-effective way to provide for your loved ones. Here are reasons why it can be an important tool.
For most people, their key economic asset is their ability to earn a living. If you have dependents, then you need to consider what would happen to them if they no longer have your income to rely on. Proceeds from a life insurance policy can help supplement retirement income. This is especially true if the benefits of your surviving spouse or domestic partner will be reduced after your death.
Pay Outstanding Debts And Long-Term Obligations
You can buy life insurance so that your loved ones have the money to offset burial costs, credit card debts, and medical expenses not covered by health insurance. Life insurance payouts can also pay off the mortgage, supplement retirement savings, and help pay college tuition.
Life insurance can alleviate the difficulties of estate planning by providing financial support to heirs. It provides funds for the payment of estate taxes, estate settlement costs or debt obligations of the deceased.
If you have a favorite charity, you can designate some of the proceeds from your life insurance to go to this organization.
The above are just a few important reasons to have life insurance. No one can predict the future, so having life insurance creates peace of mind. If you need guidance to help you with your financial goals, please contact us.