Benjamin Franklin said that nothing in the world is certain except for death and taxes. Although most people get around to paying their taxes, they neglect to buy life insurance. Most people do not see their value. They consider it a frivolous expense. Despite the aversion and resistance people have to life insurance, it is important to consider having.
No matter the circumstances, the death of a loved one can leave a heavy financial burden on loved ones. The median cost of a funeral in 2012 was 7,045 dollars and expected to increase throughout the years. There may be other financial hardships ahead as well including paying off the deceased debts, medical bills, and other foreseen expenses. Loss of income may also cause issues for surviving family members. Purchasing life insurance ahead of time provides some financial cushion to loved ones.
Another use of life insurance is estate planning. If a person accumulates a large number of assets or an estate, it may be subject to federal estate taxes. Some people may choose to purchase life insurance to help pay for these taxes or protect an inheritance.
In addition to protecting families, life insurance can protect businesses as well. The loss of a key employee or business owner can also cause financial burdens. These deaths can cause loss of credit, customers, suppliers, profits or even the business itself. Having life insurance can help ease some of these financial burdens for those who are left behind.
Although life insurance is mostly used to protect family and businesses, it can also provide benefits for people who do not. Whether it is a friend or partner, someone still has to bury the person and life insurance funds can relieve that burden. Some life insurance policies accumulate a cash value that can be borrowed against in the event of an emergency. In addition to that, some insurance policies have accelerated death benefits. This allows the insured to take out a percentage of the money to use if they are diagnosed with a terminal or critical illness.
Although death is inevitable, many people think they are going to live forever. Unfortunately, this is not the case. We can pass away at any time. Whether it is from old age, illness or an accident, death can take us at any time. Because of that, it is important to have life insurance.