Life insurance is an uncomfortable topic not many people want to talk about, as it involves thinking of the worst-case scenario. However, it’s also an important decision each person should consider at some point or another.
We live in an unpredictable world filled with uncertainty and risk around every corner. As you grow older, build a career, get married, and start a family, you may begin to realize that life insurance is fundamental to the financial future of your loved ones.
All too often, people pass away unexpectedly. Without life insurance, the people you love can find themselves in a difficult financial situation. So, how do you decide if it is the right time to take out health insurance?
Here are eight reasons why you should consider life insurance sooner rather than later.
- Provide Care for your Loved Ones
Life insurance is designed to protect the financial future of your loved ones if anything should happen to you. You may want to send your children to college or ensure your family continues to live in your home. If you’re suddenly not around to provide for them, life insurance can either pay one lump sum or make regular payments to replace lost income.
- Cover Immediate Expenses
Life insurance not only protects your spouse and children from future hardship, but it can also help with immediate expenses related to your funeral. The cost of a funeral and burial can quickly add up to thousands of dollars, and result in a significant toll on your family, who are already suffering.
- Debt can be a Tremendous Burden
In the event you pass away prematurely, it’s likely you’ll leave behind lingering financial debts. As the sole earner in the family, your loved ones may not be able to make repayments on the mortgage, car loan, personal loan or credit card without life insurance. Even if both you and your partner are employed, you need to ask yourself: will one income be enough to cover the remaining expenses?
- Buy Your Family Time and Choices
Losing a loved one is hard enough. Although having to make tough decisions straight away only adds to the pain. Life insurance gives those left to carry on a chance to deal with the devastating loss and adjust with time. Rather than immediately hunting for a new job and putting the family home on the market, your family can make important decisions when they are emotionally ready.
- A Smart Investment
Life insurance can be a wise investment. If you take out a permanent policy, a percentage of your premiums will be invested on your behalf. This means you can borrow the investment returns tax-free in the form of dividends to fund your retirement or your children’s college education. Furthermore, life insurance is considered a financial asset, which can be used to take out health insurance or home loans.
- Receive Tax Benefits
The proceeds of your policy are usually not subject to federal income or capital gains tax. For example, if your plan offers $300,000, you’ll receive $300,000 in death benefit proceeds. Also, life insurance can help pay inheritance or estate taxes on any assets your heirs are entitled. As of October 2017, estates exceeding $5.49 million are subject to inheritance tax averaging 17%.
- Protect your Business
Life insurance not only protects the financial future of your family, but it can also safeguard your business against monetary loss and liabilities. If you or your business partner passes away unexpectedly, life insurance payouts can provide necessary cash flow to keep operations going until stability is regained.
- Provide Much Needed Peace of Mind
No amount of money will ever replace a person. However, life insurance can help protect you against the uncertainties of life. You never know when your time is up, or whether you’ll develop a condition that prevents you from obtaining cover. By investing in life insurance today, your family will receive the protection they deserve.
If you’re considering life insurance or wondering whether your current policy aligns with your family’s needs, contact us today. We’re here to help with any questions.