There is a simple response to that question. Life Insurance benefits our loved ones in the event we are unable to be there providing that financial support so crucial to their future.

We will take a moment to review some of the reasons to invest in life insurance in this article.

First, is the favorable tax treatment of Life Insurance. Keep in mind that the death benefit of the individual life insurance you purchase should be tax free at your death. Plus in the case of a cash value policy, should you choose to withdraw funds while you are still alive, all of the premiums you invest come out tax free. You only pay tax on the amount you withdraw that exceeds the premiums you pay.

The most common reason is for Income protection for our family in the untimely death of one of the breadwinners of the family. Without your income, how would your family afford to remain in their current home? How would your children afford to attend college or vocational training to prepare for their own careers? Would your spouse be able to afford the costs of raising your children alone? How would your family afford the final expenses of your funeral? Even if you have investments, liquidating them quickly could result in significant loss of value if the market were to be down at the time they needed the resources.

Some additional reasons to consider Life Insurance include:

  • Student Loan debt. If you signed for your child’s student loans, and they were to pass away, you could be responsible for repayment of the loan despite the death of the child.
  • Wealth Transfer. If you would like to leave a legacy of cash for your heirs, investing a sum into a single premium life insurance policy could increase that sum substantially upon your death.
  • Saving for retirement or College. As indicated earlier, the money you invest in a life insurance policy receives favorable tax treatment, and you can build savings through cash value. This way you can put money aside for college or retirement or any other future endeavor, and if you pass away, the death benefit can be there for your heirs, and if you live, the cash value can be withdrawn with the favorable tax treatment mentioned earlier.
  • Long Term Care protection. Many policies today have provisions that allow you to withdraw a percentage of the death benefit to pay for Long Term Care coverage should you require such care. The withdrawls reduce the death benefit, but the cash is there to provide the necessary care. Some policies even have early terminal death benefits where you can take that trip you wouldn’t be able to afford before you pass away.
  • Return of Premium Policies. There are policies that will act as a regular life insurance policy, providing a death benefit, but after a certain time period, return all of the premiums you paid, tax free. Of course the death benefit ceases at that point.

Life Insurance is not as expensive as many of us think. Please let us do a no obligation review of your needs. Your loved ones may very well be the beneficiaries of your thoughtful planning.