Why buy Life Insurance?
Life insurance is one of the subjects that nobody wants to talk about. We all say we are too you young for insurance, or we say we are not ready to die yet. But Who Is?
To help you understand how life insurance might apply to your particular situation, we’ve outlined a number of different scenarios below.
You’re Married
Many people believe that they don’t need to think about life insurance until they have children. Not true. What if one of you died tomorrow? Would your surviving spouse’s income be enough to pay off credit card balances, car loans, and cover monthly rent and utility bills? If you’re planning to have children, you’ll want to buy life insurance now instead of waiting until pregnancy—some companies won’t issue policies to pregnant women.
You’re Married With Kids
Most families depend on two incomes to make ends meet. If you died suddenly, could your family continue to pay the rent or the mortgage, and continue to have their standard of living on your spouse’s income alone? Would their plans for the future—like college stay intact? Life insurance makes sure that your plans for the future don’t die when you do.
You’re a Single Parent
As a single parent, you’re the caregiver, breadwinner, cook, chauffeur and so much more. Yet nearly four in 10 single parents have no life insurance, and many with coverage say they need more than they have. With so much responsibility resting on your shoulders, you need to make doubly sure that you have enough life insurance to safeguard your children’s financial future.
You Have Grown Children
Just because your kids are through college and the mortgage is paid off doesn’t necessarily mean that you no longer need life insurance. If you died today, your spouse will still be faced with daily living expenses. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you’ve worked so hard to achieve now and into retirement?
You’re Retired
Depending on the size of your estate, your heirs could be hit with an estate-tax payment of up to 45% after you die. The proceeds of a life insurance policy are payable immediately, allowing heirs to take care of these taxes, funeral costs and other debts without having to hastily liquidate other assets, often at a fraction of their true value. Life insurance proceeds are also generally income tax free and won’t add to your estate tax liability, if properly structured.
You’re a Small-Business Owner
Besides taking care of your family, life insurance can also protect your business. What would happen to your business if you, one of your fellow owners or a key employee died tomorrow? Life insurance can help in a number of ways. For instance, a life insurance policy can be structured to fund a buy-sell agreement. This would ensure that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. That way, the owners get the business and the family gets the money. To protect your business in case of the death of a key employee, key person insurance, payable to the company, provides the owners with the financial flexibility needed to either hire a replacement or work out an alternative arrangement.
You’re Single
Most single people don’t need life insurance because no one depends on them financially. But there are exceptions. For instance, some single people provide financial support for aging parents or a sibling with special needs. Others may be carrying significant debt that they wouldn’t want to pass on to family members who survive them. Insurability is another reason to consider life insurance when you’re single. If you’re young, healthy, and have a good family health history, your insurability is at its peak and you’ll be rewarded with the best rates on life insurance.
By Paul Arakelyan, CEO
If you are interested in getting more information about life insurance, you can request an appointment by writing to us at info@legacypartnersinsurance.com.