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Life Insurance…Who Needs it, Anyway?
You might. As a matter of fact, you probably do.
We know that different people buy life insurance for different reasons, but most of us have a need for it at some point in our lives. The type we need, the amount we need, and the reasons why we need it may change; but it definitely plays a role in most financial plans.
Here are some reasons why people purchase life insurance:
Pay for final expenses and funeral costs
Even if you have few assets and no family to provide an income for, life insurance can cover final medical expenses and funeral costs, freeing your extended family from carrying those costs.
Pay off debts
Life insurance can be an inexpensive way to make sure there is ready cash to cover any financial obligations you leave behind.
Replace your income for your family
Although replacing an income may not feel like you’re replacing an asset, consider this… If you’re young, the most valuable asset you have is your ability to continue to earn an income for your family in the future.
If you are 35 years old and earning $50,000 per year, and planning to work until age 65, that’s $1.5 million. And that’s without any increases in pay over that time.
Estate Planning
Many people use life insurance as part of an estate planning strategy designed to potentially reduce estate taxes and to pass more money to their heirs.
Small Business Planning
Life insurance can be a useful tool for business owners structuring buy/sell arrangements or interested in ways to provide benefits to key employees.
Life insurance can help with other needs as well, and no matter the reason, it can be a very inexpensive way to take care of some potentially very expensive costs.
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