3 Common Reasons Why People Buy Life Insurance
Though it’s not pleasant to think about dying, all of us must give some thought to the fact that none of us is “getting out of here alive!” But not buying life insurance can be among the worst decisions any of us can make … it could prove to be absolutely devastating to those loved ones we leave behind.
In a very real sense, and in the simplest form possible, just think about giving your loved ones the ability to “buy some time” after you go, because, unfortunately, sometimes death comes unexpectedly, without any warning whatsoever, and leaves in its wake mental, emotional, and financial havoc.
#1: Protect loved ones from financial burden
You can provide money to protect your spouse and dependents upon your death. You can even arrange to have insurance to pay off your home mortgage, usually the largest debt most families face.
Many people start with a term life insurance policy when they're in their 20s and 30s because it's a cheaper way to protect their beneficiaries from an untimely death. However, many people switch over to a permanent policy which offers more financial benefits than just a death benefit.
#2: Final Expense costs
Whether you want to be buried at the cemetery or would rather be cremated, there's a lot of costs associated with taking care of your remains. Many people don't want their loved ones to be financial responsible for these costs and want to make their death as easy as possible to deal with.
If you can't afford a general life insurance policy to cover these costs, you can buy a final expense policy that's designed to just cover your burial or cremation services.
#3: Minimize Taxation on wealth transfer
Wealth Transfer is a tax-efficient method to protect your heirs legally from losing a large percentage of your estate to taxes and keep your beneficiaries from being placed into a higher federal income tax brackets.
Also, if you are leaving a large estate, you can actually provide life insurance proceeds to pay federal and state estate taxes!
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