Why should I even bother to buy a life insurance?
Numerous economic experts believe life insurance to be the basis
of sound economic planning. It is in general a cost-effective
way to take care about your loved ones after you are departed.
It can be an important instrument in many ways.
Income substitute For the majority of people, their main
financial asset is their capability to make a living. If you
have people depending on you, then you need to think about what
would happen to them if they suddenly do not have your income to
count on. Income from a life insurance policy can help
complement retirement income. This can be particularly useful if
the benefits of your surviving other half or family partner will
be reduced after you pass away.
Pay your debts Think of life insurance so that your loved
ones have the money to pay for the funeral, credit card debts
unpaid and medical expenses not covered by health insurance. And
further, life insurance can be used to pay off the house loan,
as extra retirement savings and assist pay college education.
Charitable donations If you have a favourite aid
organization, you can assign some of the money from your life
insurance to go to them.
Okay, you get the picture - you need a life insurance!
How much life insurance do you need? To make a decision
about how much life insurance to get, you need to find out what
your goals are in buying this coverage. Try to find answers for
the following: Should I spare my loved ones for the funeral
costs and other outstanding debts? Am I worried that my wife or
domestic partner will not be able to continue to pay off the
mortgage? Do I have dependents who count on my income? What
about college savings for my children or retirement savings for
my spouse if I die?
Dependents If you have children, or your other half does
not work outside the home. Or maybe your aging parents life with
you, and you financially take care of them. Then you have
dependents. Are your loved ones capable of paying the mortgage
without your financial contribution? Either way, your loved ones
will no longer have your income to help them pay the bills and
keep their lifestyle after you are gone. You will have to buy
enough insurance to provide for their future. Your family may
also need extra money to make some changes after you die. They
may want to move or your other half may have to go back to
school to be in a better position to help support the family.
No dependents If you are young and want to have a family
in the future, you might also want to buy a life insurance now
so that you can lock in a good rate. Just because you do not
have dependents, does not mean you do not have responsibilities.
You may be concerned with not being an economic burden to others
when you die. You may also want to leave some money behind to
your family, friends or a charity. You should buy enough
coverage to pay outstanding debts, tax liabilities and funeral
expenses.