Get Affordable Life Insurance!


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Get Affordable

Life Insurance!

Male Female

Why Buy Life Insurance?

Unfortunately, many people buy life insurance for the wrong reasons. Some buy policies to save for retirement, when they can do that better with IRAs or 401(k)s. Others believe taking out a life insurance policy will help them save for a child's education, or for the down payment on a home or a car when, in fact, there are better financial tools one can utilize for these things. Some even erroneously take out policies so that they will be insured for the rest of their lives, little realizing that they will be paying into it during their retirement! Many times agents dangle life insurance and savings as two products in one, but this isn't really the case because you can only get one of them back. If you die, you lose the savings. Conversely, if you cancel the policy, you get the savings (minus surrender charges), but you lose the coverage.

There are also gray areas when it comes to reasons to buy life insurance. For instance, if you are a young couple with no children and you buy life insurance, you are taking a risk that you'll need the coverage in the future and won't qualify for it. There's no way you can afford to insure against every possible future outcome, so you'll have to establish your financial priorities and see where having life insurance for future needs falls with regard to your other expenditures.

On the other hand, there are some very good reasons to buy life insurance. First, life insurance can protect your income and provide a financially secure future for your dependents. Life insurance can help pay off your debts, your mortgage and your children's childcare or college education. Most immediately, a life insurance policy will defray funeral and tax expenses, and provide immediate income should your property get tied up in probate. There are many valid reasons to buy life insurance, and taking out a policy should be an integral part of any financial planning discussion.