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Life Insurance


Why should I buy life insurance?

Your income is what puts food on the table and a roof over your head. But what if you died tomorrow? In that unfortunate circumstance, your life insurance is what your family members would rely on to maintain their quality of life. And there is no Federal Income Tax on life insurance benefits.

Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool for the following reasons:

Replacement income for dependents
If people depend on your income, life insurance can replace that income for them if you die. The commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially. Insurance to replace your income can be especially useful if the government or employer sponsored benefits of your surviving spouse or domestic partner will be reduced after your death.

Pay financial expenses
Life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.

Create an inheritance for your heirs
Even if you have no other assets to pass on to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiary.

Pay federal ‘death’ taxes state ‘death’ taxes
Life insurance benefits can pay estate taxes so that your heirs will not have to liquidate other assets or take a smaller inheritance.

Make significant charitable contributions
By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy’s premiums.

Create a source of savings
Some types of life insurance create cash value that, if not paid out as a death benefit, can be borrowed against or withdrawn on the owner’s request. Since most people make paying their life insurance premiums a high priority, buying a cash-value type policy can create a kind of “forced” savings plan. Furthermore, the interest credited is tax deferred (and is exempt if the money is paid as a death benefit).


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