Let’s face it – each of us is going to die one day and we need to plan for the inevitable. Many of us currently do have an inadequate amount of life insurance coverage. Below are five very good reasons to obtain appropriate life insurance coverage:
- Life insurance benefits are not for you
Once you pass away, your money is no longer yours. The point of life insurance is to leave your estate beneficiaries with funds for their own financial protection.
- Final expenses
According to National Funeral Directors Association, the 2019 national median cost for a funeral with a vault is $9,135. On top of funeral expenses, there are typically medical expenses and professional fees for establishing and distributing your assets. Instead of beneficiaries drawing on the assets left to them, life insurance benefits can pay for these expenses.
- Lost income
If you are the bread winner or sole income producer of your family, your death means a lack of income for your family. Life insurance benefits are there to replace the income that is lost if you were to pass away while still working.
- Future expenses
Your family will still incur regular living expenses when you pass away, which could potentially increase. For example, if your spouse is a stay-at-home parent to young children and you pass away suddenly, the spouse will begin working again and will most likely incur childcare costs.
- Finally, no taxes
Life insurance benefits are generally not taxable to beneficiaries. This means that, generally, if you have a life insurance policy for $500,000, your beneficiaries receive $500,000 without incurring a tax bill.
There are numerous different types of life insurance policies to choose from. Some of these policies have riders that may allow you to convert the policy to another type of policy, such as long-term care insurance policy.
Should you have any questions or concerns, please do not hesitate to contact one of our advisors.