Life insurance

A very important and often overlooked part of a sound financial plan always includes life insurance. If someone depends on you financially, the likelihood is very high that you will need life insurance. Life insurance provides cash to your beneficiaries upon your death. The money your beneficiary receives (the death benefit) can be an important financial resource.

Your beneficiaries can use this money to help cover the costs of daily living expenses, pay off the mortgage, and any other outstanding loans. It can also be used to fund tuition, and ensure that your family is not burdened with any debt after you pass away. Another advantage is that beneficiaries won’t have to pay federal income taxes on the money they receive as life insurance proceeds are exempt from probate taxes.

The two types of life insurance are term and permanent, and within these categories there are several sub-categories. Term life insurance policies help to meet a wide variety of business and personal needs. Term life insurance often provides the most coverage for your premium dollar for a set period of time. Permanent life insurance policies provide lifetime protection.

Proper coverage is different for everyone according to your respective needs. Everyone’s needs are different. The one that's right for you depends on many issues, including your budget, the amount of coverage you need, and the length of time you want the coverage to last.

A qualified and licensed life insurance agent or financial advisor can help you determine what level of protection is right for you and your family based on your financial responsibilities and sources of income. There are online calculators that can also help; however, sitting down with a licensed insurance professional to review your financial needs can give you a more personalized view of your needs.