Why Life Insurance is Essential for Your Family?s Future

It provides financial security, helps pay off debts and pays for funeral expenses.

It can also help replace income. Calculating your family’s need for life insurance can be complex, but there are tools to help you figure it out.

Income Replacement

Your family depends on you for everything, from clothes on their backs to the food they eat. Having income replacement coverage can give them the peace of mind they need in case you pass away unexpectedly.

44% of American households would experience financial hardship within half a year if the primary wage earner died, according to LIMRA research.

In these tough times, many middle-income Americans are cutting back on discretionary spending, including life insurance. While this may be understandable, it can also be dangerous to do so.

Final Expenses

Final expenses often include funeral costs, lingering medical bills and credit card debt. They can all be significant expenses for families, especially if they are not prepared.

A death benefit from a life insurance policy is a great way to provide loved ones with the funds they need to cover these expenses. It can also be used to pay for other end-of-life bills such as legal fees and housing costs.

Another type of life insurance that can be helpful for final expenses is burial insurance, also known as funeral or burial insurance. These policies are easy to qualify for and require no medical exams.

These policies can range in coverage amounts from low four figures to mid-five figures. They can be used to pay for a casket, funeral service, obituary, nursing home bills or flowers.

Business Success

For most business owners, a sudden loss of a key employee can spell disaster. The death of a key employee can cause loss of key customers, lost opportunities to grow the business, and the dreaded layoffs. Having a solid insurance program in place can mitigate the financial impact of the unthinkable. The best way to start is by getting a consultation from a qualified insurance expert who can provide a complimentary no-obligation quote or estimate for your business. There are many factors to consider when evaluating a life insurance solution, such as your personal and business financial situation. The key to a successful insurance policy is determining what your family’s needs are and the types of coverage you will need. There are many options to choose from, and it may take some time to identify the right type of insurance for you.

College Funding

Often, personal savings are the primary means of funding a family?s education costs. These funds can come from personal accounts, tax-advantaged financial vehicles such as a 529 plan or savings from friends and family.

College tuition cost is skyrocketing and many families are struggling to keep up with these expenses.

One of the best ways to save for college is to create a college funding plan that includes both tax-advantaged savings and death benefit protection, like life insurance.

When used correctly, a college funding plan can help you save for the future without compromising your current financial goals. It can also offer some financial flexibility, such as the ability to borrow against the cash value of your life insurance policy or leverage other assets.

Dependents

If you have dependents, you may want to consider buying life insurance. It’s a relatively inexpensive way to ensure that your family will be financially secure in the event of your death.

Your dependents are people who depend on you financially, such as your children and your spouse. They are also the people who will take care of your household if you die.

The IRS has a series of tests to determine who qualifies as a dependent, including a relationship test and how much support is provided in a tax year.

In addition, your dependents must meet special residence rules and live with you for half the year to qualify as a dependent. Those who do not satisfy any of these requirements can still be claimed as dependents if they have other qualifying relationships, such as a foster child or an in-law.