There are many, many reasons to consider life insurance. Here are a few of the most common:
- Burial and other final expenses— Costs within this category can easily amount to $10,000-$20,000.
- Peace of mind— Knowing others will not have to be responsible for debts you incurred or expenses incurred on your behalf.
- Lock in a low premium at a young age— Premiums for life insurance can easily double between ages 23 and 45
- Provide a nest egg for your future and/or unexpected emergencies— The cash value feature found in a variety of life insurance policies is easily accessible when needed for any purpose.
- Income replacement— Proceeds from a life insurance policy can replace lost income from the insured due to death.
- Provide funds for college— Proceeds from a life insurance policy are not restricted in use so it is a perfect solution to insuring that college funds are available to the family in the event of the premature death of the breadwinner. On the brighter side, a properly selected cash value policy will have funds available to the policy holder as a loan.
- Mortgage protection— The right term decreasing term policy will pay off the family’s mortgage at the untimely death of the breadwinner enabling the family to remain in the home
- Supplement your retirement plan— The potential build-up of cash value from a life insurance policy during your working years can be used as supplemental income during your retired years.
- As a tool for estate planning— You can transfer more wealth to your family if a life insurance policy is part of your estate
Each of the examples in this section will provide you with different family dynamics from: single, married without children, married with children, empty nesters and retired. Each example will address the 10 most common reasons for considering life insurance and place them in one of three categories:
- Reasons for coverage
- Reasons to consider coverage
- Too soon to consider coverage
You will see that each of the different family dynamic scenarios will categorize the most common reasons for purchasing life insurance differently. The rationale for this along with some additional commentary will be provided in the Overview section.