What Life Insurance Can Do For You
Life Insurance will deliver a "death benefit" if you should die (meaning that your family will receive the money in your insurance policy), which can help your family survive financially after you are gone. In addition, some policies include an investment element, meaning that some of the money can be invested in the stock market or taken out as a cash loan, so that you have financial flexibility and potentially increased income from your policy while you are alive. Depending on the stage of life you're in, the type and amount of insurance you need will vary. Buy life insurance.
Life Insurance For New Families
Many new families with young children or with children on the way purchase Life Insurance as a financial security measure. If both parents are covered, the surviving spouse and child will be financially provided for should something should happen to one of the parents. The money can cover immediate costs after a death (such as funeral costs and paying debts) as well as future costs, such as lifestyle maintenance (housing, transportation, living expenses) and even college tuition. Many new families insure both parents, even if one parent doesn't work full time. Even if a parent doesn't have any income, he or she may be providing valuable services (household care, child care, transportation, etc.) that would be expensive to replace.
Life Insurance For Single-Parent Families
As with dual-parent households, single-parent families may use Life Insurance as a means of ensuring that children are provided for should something happen to the parent. Unlike dual-parent households, however, many single-parent families only have one source of income. Should something happen to a single parent, there may be no other sources of income to provide for children. And considering that single parents often perform the roles of two people—providing income, care giving, transportation, housing and housekeeping, etc.—Life Insurance benefits can help cover these costs after a death.
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Life Insurance For Established Families Or Families With Grown Children
For families with older children who are in college or out of the house, Life Insurance can continue to serve a number of functions. While the immediate needs of providing financially for young children are no longer relevant, the death benefit can help older children continue to pay tuition or get their own families started should a policy-holding parent die. In addition, parents can continue to use Life Insurance policies as both investment- and retirement-planning tools. Whole Life or Permanent policies are often used as investment vehicles, since a portion of the policy can be invested in the stock market, which can be used to diversify existing financial holdings.
Also, Whole Life allows you to access a portion of the money in the policy as a tax-free loan to pay for unforeseen expenses, such as medical care or other unexpected events in your life. And with the additional purchase of riders such as an Accelerated Death Benefit Rider, Life Insurance can provide financial assistance in case the policyholder should become sick. More and more, people are having a harder time providing for themselves in retirement, and this is a way to provide for aging spouses should something happen to the other spouse.