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Life Insurance: 4 Reasons it should be Part of Your Financial Plan

August 19, 2014
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A sound financial plan becomes more important as you grow older, get married, build a family and develop your assets.  While most people don’t like discussing the benefits of life insurance, it certainly has an important place in your financial planning. 

If someone will suffer financially when you die, chances are you need life insurance, which provides benefits to your family after your death. These untaxed benefits can replace your income and help your family meet many important financial needs like funeral costs, daily living expenses and college funding.  

 

In addition to being used for providing income and funds for a policy holder’s dependents, life insurance policies are also used by both individuals and businesses for financial, estate and business planning purposes.

Here are 4 reasons why life insurance should be included as an important part of your financial planning:

1. To Protect Your Family and Loved Ones

Life insurance replaces your income when you die.  If your spouse or loved ones depend on your income, a good life insurance plan is essential.  It can provide money to cover the costs of daily lifestyle, unexpected expenses, and educational needs for your children.

2. To Leave An Inheritance

Even if you have no other assets to pass to your heirs, you can create an inheritance by setting up a life insurance policy and naming them as beneficiaries. This is a great way to leave your children with a solid financial future and provide for any monetary needs that will arise, such as college tuition.

3. To Pay Off Debts and Other Expenses

Along with income to cover everyday living expenses, your family needs insurance to cover outstanding debts, such as the mortgage, credit cards and car loans, as well as funeral and burial costs that can easily run into the tens of thousands of dollars.  The right life insurance policy can help provide for your loved ones  financially so they will not be left with any extra financial burden in addition to the emotional burden they are already suffering from losing someone they love.

4. To Add Security to Your Financial Plan

In addition to providing income and funds for loved ones, life insurance policies are being incorporated by both individuals and businesses for a variety of other financial needs.  Over time, life insurance has become a primary component of overall financial, estate, and business planning.  Charting out your goals carefully with a financial professional will help ensure you choose the life insurance policy that will help you meet your goals.

Most Americans need life insurance.  None of us know when we will pass away, whether tomorrow or 50 years into the future, but we know that next to taxes, it is something that cannot be avoided.  Take a moment to speak with your financial advisor today to make life insurance a valuable component of your financial strategy.