If someone in your family will suffer financially when you die, you more than likely need life insurance. Life insurance provides money to your family after your death. This money — known as the death benefit — replaces your income and can help your loved ones meet many important financial needs, such as funeral costs, daily living expenses, paying off loans and other debts, and college tuition. More importantly, there is no federal income tax charged on life insurance benefits.
To determine if you need life insurance, think through this worst-case scenario: If you died tomorrow, how would your spouse and children fare financially? Would they have the money to pay for your final expenses, including funeral costs, medical bills, taxes, credit-card debts, and attorney fees? Would they be able to meet ongoing living expenses, such as the monthly home mortgage or rent, food, clothing, transportation costs, and healthcare? 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? It’s always a struggle when you lose someone you love, but your emotional ordeal does not need to be compounded by financial difficulties.
Life insurance helps make sure that the people you care about will be provided for financially, even if you’re not there to care for them anymore. To help you understand how life insurance might apply to your particular situation, contact a local professional who can sit down and explain the various options. Whether you’re young or old, married or single, with or without children, you need to make the time to consider how life insurance might fit into your financial plans.
