Why Purchasing Life Insurance A Smart Choice

Why Purchasing Life Insurance A Smart Choice

As no one can predict what'll happen very next moment, wise people like to secure their and their family's financial future with the help of a life insurance plan. Insurance can act as a financial support your family will need In the event of your death. Hence, purchasing term/whole life insurance plan could be the best decision you'd have made.

Below are mentioned six reasons to explain it to you why purchasing term or whole life insurance is essential to protect your family.

• Stable Income Source

Life is unpredictable, so it's wise to be prepared. Purchasing term/whole life insurance so your loved ones stay financially protected even in the event of your death is good decision. Money gained from your life insurance policy can provide support to your family/depends, not leaving them to bear the burden of income lost due to your death. This applies mostly in two cases, first, parents with young children and in couples, if the death of one partner could leave other in financial hell. Life insurance plans works as a replacement income, if your parents, siblings, spouse or adult children are dependent on your income. Another use of having life insurance cover is it'll another source of income, if your surviving spouse/partner's government/employer-sponsored benefits will be reduced in the event of your death.

• Cover for Last Expenses

Your life insurance could also cover funeral and burial expenses and if you have planned your insurance very carefully then it'll also cover mortgages and other costs. Life insurance that provides protection to your loved ones after your death can also cover debts and medical expenses not covered by health insurance.

• A Forced Savings Plans

Your life insurance can also act as your savings plan as some plans can create a cash value that owner can withdraw at request. The best part, interest credited is tax deferred and if you get the money as part of death claim, the interest can be tax exempt.

• Allows To Create Inheritance

You can also create an inheritance out of life insurance plan for your heirs or immediate relatives. You can create inheritance by naming some family member as your heir(s) in your policy.

• Naming Charity As Your Beneficiary

If your family doesn't need your life insurance then you can also name some charity of your liking as your beneficiary. This way you end up making larger contribution than you'd have if have donated cash equal of your policy's premium. When you donate your policy, it allows you to deduct the cost of premiums from taxes. When you donate whole life insurance, you can deduct cost of premiums and the cash value of whole life insurance. In both scenarios, in the event of your death, the charity you've selected gets the insurance plan.

• Paying Estate Taxes

Consider purchasing a quality life insurance policy rather than leaving your surviving family members with smaller inheritance or some assets. Certain life insurance plans also offer tax free cash and you can use it to pay estate taxes and death duties.

Planning ahead for the future is the key to secure financial future of your loved ones, hence having a quality life insurance plan in place is a must, consider having one.

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