 |
Why Buy Life Insurance?
By Stuart Simpson
Love. Yes, that’s right. Love for your spouse, children, family,
or even your school. This insurance provides financial protection
for your family and friends when you die. There are basically two
types of life insurance – Term and Permanent.
Term life insurance provides insurance for a specific amount of
time. Like, for one year. You can usually renew annually, and this
is called “Annual Renewal Term”. This works until about age 80.
Level Term offers you a level premium for a fixed amount of years.
You lock in a rate for 20 years. Then you have to get a new rate
or new policy.
Permanent Insurance is also called whole life, universal life,
etc. This form of life insurance also has a built in savings plan.
You get a death benefit with a cash value savings plan attached.
Of course, this plan is more expensive, but allows for some financial
latitude.
You may be wondering why you would need insurance and what could
you do with the proceeds if your spouse or loved one died. Here
are some ideas that would help with the financial loss.
- Income. Even if your spouse works, loosing one salary could
be devastating.
- Housing. The money could be used for rent or payoff the mortgage.
Your spouse may not want to stay in the house, but it will give
some options for them.
- Debt. Reducing debt due to the loss can help the surviving spouse
continue to be financially solvent. This will help your spouse
survive on one income.
- Pay Expenses. Funeral and hospital bills can be tremendous.
The average funeral is $6,000.
- Social Security. Its there, but it takes a while for it to kick
in so to speak. Better cover yourself until that first check arrives.
- Education. Think about the high costs of education and the burden
that would be with only one income. Account for an educational
nest egg to give your kids a head start.
- Charity. If you don’t have anyone, this would be a good option.
Also, you can get a tax deduction for the rest of your estate
if you give some money away. In other words, give a chunk away
and you might be able to keep some assets to give to your family.
- Taxes. Two things certain. Death and Taxes. You may have to
pay taxes on your 401k and other assets even though you are dead.
If you don’t get these assets before you die, then the person
receiving the benefit must pay the tax.
These last two items are a bit tricky and would require expert
assistance from a tax attorney or estate attorney.
Think about your family and decide what type of life insurance
would protect them the best. Let me know if you can think of other
helpful information on what to do with life insurance proceeds.
Stuart Simpson
http://www.insurance--review.com
Article Source: http://EzineArticles.com/?expert=Stuart_Simpson
Another opinion on: How to Buy a Life Insurance Online
Can't find what you are looking for?
Try our Search Box:
|
|
|
