Term life insurance is an insurance policy that will give a lump sum payment to beneficiaries upon the death of the policy holder.

While most people cringe at the bare mention of life insurance there are many important reasons why coverage should be obtained. Simply because a subject puts us ill at ease does not mean that we should not think about it.

Here are the following reasons why you should obtain term life insurance coverage.

Term Life Insurance Reason #1

Financial stability for your beneficiaries. If you are no longer around you want to ensure that your beneficiaries, ex: children, spouse, other dependants, can continue to enjoy their present lifestyle. There are many stories of families who had to give up their current lifestyles because the main income earner was no longer around.

Term Life Insurance Reason #2

Peace of mind. While having peace of mind might seem like a minor reason for purchasing term life insurance it actually can be one of the most important ones. Think about the difference in your life if you knew that your dependants would be fine if you were no longer around. The notion that your family would have sufficient funds would give you the confidence to pursue a full life even if doing so entailed taking risks.

Term Life Insurance Reason #3

Estate tax planning. Once you are no longer around the IRS will expect your heirs to pay taxes on your assets. If they do not have the financial resources to pay the taxes your estate will need to be liquidated. Since we all know that liquidation sales usually force down the price that assets are sold at, we would want to avoid this. Therefore, you would be better off having a term life insurance policy which would deliver a lump sum to your heirs. They could then use that money to pay any taxes owed on your estate.

Donny Lowy manages http://www.americanlifedirectonline.com an online term life insurance portal.