Why Should I Buy Life Insurance?

Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in the following situations:

Replace income for dependents

If people depend on your income, life insurance can replace that income for them if you die.

The most commonly recognized case of this is parents with young children. However, it can

also apply to couples in which the survivor would be financially stricken by the income lost

through the death of a partner, and to dependent adults, such as parents, siblings or adult

children who continue to rely on you financially. Insurance to replace your income can be

especially useful if the government- or employer-sponsored benefits of your surviving spouse

or domestic partner will be reduced after your death.

1.  Pay final expenses

Life insurance can pay your funeral and burial costs, probate and other estate administration

costs, debts and medical expenses not covered by health insurance.

2.  Create an inheritance for your heirs

Even if you have no other assets to pass to your heirs, you can create an inheritance by

buying a life insurance policy and naming them as beneficiaries.

3.  Pay federal “death” taxes and state “death” taxes

Life insurance benefits can pay estate taxes so that your heirs will not have to liquidate other

assets or take a smaller inheritance. Changes in the federal “death” tax rules between now

and January 1, 2011 will likely lessen the impact of this tax on some people, but some states

are offsetting those federal decreases with increases in their state-level “death” taxes.

4.  Make significant charitable contributions

By making a charity the beneficiary of your life insurance, you can make a much larger

contribution than if you donated the cash equivalent of the policy’s premiums.

5.  Create a source of savings

Some types of life insurance create a cash value that, if not paid out as a death benefit, can

be borrowed or withdrawn on the owner’s request. Since most people make paying their life

insurance policy premiums a high priority, buying a cash-value type policy can create a kind

of “forced” savings plan. Furthermore, the interest credited is tax deferred (and tax exempt if

the money is paid as a death claim).

This information provided by the Insurance Information Institute.

Protect your family with the insurance Texans trust and save an additional 10% on your Germania home premium. Contact Randall Harred today and let us quote your life insurance needs and see if we can save you money!