life insurance coverage

Is Your Family Protected with Adequate Life Insurance?


22 August,2012

When it comes to life insurance, more than 50 million in the United States aren’t doing an adequate job. So many families lack the life insurance coverage that is needed to ensure financial stability after the passage of a breadwinner. Due to this state of affairs, Jeff Rose is launching a Life Insurance Movement in the hopes of raising awareness about the importance of life insurance.

The Roth IRA Movement was great success, and hopefully this movement will encourage families to get the life insurance that they need.

Protection for Your Family’s Finances

One of the reasons life insurance is so important is that it protects your family’s finances. Life insurance is one of the policies you should have — especially if you have dependents. Are there people depending on you to provide for them? If so, you need life insurance if you don’t want them to suffer a financial catastrophe should you die unexpectedly. They will already have their grief to deal with; you don’t want to add financial burdens on top of that.

Life insurance can help you protect your family’s financial resources. Life insurance can:

  • Pay off debts: Debt obligations can drain wealth and stress a family. Life insurance can pay off those debts. From car loans to mortgages to credit cards. Life insurance can clear out the debts so that your family doesn’t have to worry about paying interest, or losing the house.
  • Cover funeral expenses: Funerals can be expensive. Good life insurance can cover those costs so that your family doesn’t have to try to come up with the money.
  • Pay estate taxes: If estate taxes are part of the equation (which may not be the case if you have a spouse take over everything), your life insurance policy — which is tax-free money for your family — can pay those.
  • Income for future years: Your family can use your life insurance policy as a way to provide income in future years. This can be through an actual amount equal to your salary for the next 10, 15, 0r 20 years. Another option is to leave a large enough chunk of capital to generate the returns that allow your family to cover its expenses.
  • Other goals for your family: Your life insurance benefits can help your kids pay for college, or cover the cost of child care and other services. This money can help smooth the transition as much as possible, and provide a future for your family.

Basically, life insurance allows you to keep providing for your family, even after you are gone. Life insurance is an important part of overall financial planning. And, it doesn’t have to be expensive. Term life insurance can be bought cheaply. A relatively small premium can buy a fairly large amount of coverage. If you are a young family, worried about costs, but you still want the protection that comes with life insurance, term life insurance can be an elegant solution.

Look at your family’s needs for the next decade or two. What happens if you unexpectedly die during that time? Life insurance can provide your family with the financial support it needs in your unfortunate absence.