Why Do I Need A Life Insurance Policy?

You may be asking, ” Why do I need a life insurance policy, is it that important”. Well there are many reasons that people want to get a life insurance policy in place so we will discuss some of the major reasons here.

One of the main reasons someone will purchase a life insurance policy is the peace of mind they are not leaving the financial burden on their loved ones. Most people want to know that during one of the most difficult times for their loved ones that they will not have the additional burden of paying for the funeral and final expenses. A life insurance policy can take care of those needs and depending on the size of the policy can also cover other expenses or bills that are left behind.

Life insurance plans can be personalized for each individual and you can decide how large or small a policy you can fit into your budget but still leave your family without the added stress and financial burden of having to pay for your final expenses. Some families will choose a plan that covers a basic cremation or small burial plan while others will decide on coverage that will covers all of that plus leave funds to pay other expenses such as auto payment, mortgage, medical bills, and more.

So this leads into the next reason that a life insurance policy is important. Some people may have a lot of debt accumulated in their life and they don’t want to leave the debt and responsibility to their loved ones. One example is a small business owner or farmer who has continual debt in running their business. They don’t want their spouse and children to suffer excessive financial burdens from the debt as well as the loss of income from the business.

Some families will have investments and no debt so they will ask about the purpose of a life insurance policy. In these cases a policy is beneficial to the family member for investment purposes, a college fund, to purchase a home, etc. There are people who make the beneficiary the church where they attended or a favorite charity or other private organization.

Other reason to have a life insurance policy is that you can make affordable monthly payments instead of your spouse or loved ones being faced with the stress of coming up with a large lump sum in a short period of time.

A life insurance policy will pay the claim directly to your beneficiary and the proceeds are tax free. If money is set aside in a bank for the cost of a funeral the money is taxed and there is a risk of the money being held up in probate or being spent for nursing home care or other situations and then nothing left for final expenses.

These are just some of the many reasons because each of us are individual but this should get you thinking and you may just find on of these fit your needs.