Why Buy Life Insurance? - Spendonlife.com

Life insurance protects those who depend on your paycheck. If you die prematurely, life insurance provides your dependents with ongoing income to replace yours. Life insurance should be an integral part of your financial planning strategy. A general policy can be an important planning tool:

Income replacement
If you have dependents, consider what would happen to them if they no longer had your income to rely on. Proceeds from a life insurance policy can help remove financial strain on your family after your death. Your surviving spouse or domestic partner could also see a reduction in future or present retirement income, so life insurance can help close this gap.

Pay outstanding debts and long-term obligations
Life insurance spares your loved ones the burden of paying for burial costs, credit card debts and medical expenses not covered by health insurance. In addition, life insurance can be used to pay off the mortgage, supplement retirement savings and help pay college tuition.

Estate planning
The proceeds of a life insurance policy can be structured to pay estate taxes so that your heirs will not have to liquidate other assets.

Charitable contributions
If you have a favorite charity, you can designate some of the proceeds from your life insurance to go to this organization.

Life Insurance as Part of Your Long Term Financial Plan
You may not want to think about it, but your death can be financially devastating to the people you love. At the very least, there are funeral and burial costs which can run in the thousands. There may also be estate taxes and outstanding debts to pay. If you have dependents, they will have to cope with these costs while no longer having your income to rely on.

The proceeds from a life insurance policy can be of tremendous value. The "death benefit" will provide economic assistance to your family right when they need it the most. It's not just a money issue. Life insurance benefits will help your family maintain their current lifestyle with no interruptions while they deal with the emotional fallout of losing their loved one.

There are many choices when it comes to life insurance. More than 1,500 insurance companies offer policies, so it's important to work with a knowledgeable insurance agent to sort out the best policy for you.