If someone will suffer financially when you die, chances are you need life insurance. Life insurance provides cash to your family after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding. What’s more, there is no federal income tax on life insurance benefits.
The truth is, it’s always a struggle when you lose someone you love. But your emotional struggles don’t 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 yourself.
Still wondering why you need life insurance? Let’s take a look at some different scenarios.
Couples don’t usually believe they need life insurance until they start having kids. Common mistake. What if one of you died tomorrow? Would your spouses income be enough to pay off debts, loans and rent/utilities?
It’s true, most single people don’t need life insurance because no one depends on them financially. However, if you’re carrying significant debt, you don’t want to pass it on to the family members that you leave behind. If you’re young, healthy and have a good family health history, you’ll be rewarded with the best rates on life insurance.
You’re a Single Parent.
You’re the soul caregiver, breadwinner, chef, and taxi service. But did you know almost 50% of single parents have no life insurance? With so much responsibility it’s crucial to make doubly sure you have enough life insurance to safeguard your children’s financial future.
Depending on the size of your estate, your heirs could be hit with an estate-tax payment up to 45% after you pass away. 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 liquidate other assets.