People have life insurance so that their survivors are not excessively burdened upon their death. Whether it be from the relatives taking up a collection for the funeral, to a business losing money while trying to replace a key employee, life insurance takes away part of the sting of that loss. It makes the transition to life without that person more bearable, not having to worry about finances in the midst of their grief and the many details at hand.
Many people see Life Insurance is a legacy, a sign of caring, that they can leave to their loved ones. And if they don't see it that way, I worked in a funeral home for a few years, I have seen how their loved ones concur with that sentiment.
For most people, life insurance is purchased for the death benefit it provides to the beneficiary. You have to ask yourself, "If I died today, would anyone be affected financially?" If the answer is yes...you need life insurance.
For a single person, it may be as simple as covering funeral, cremation or other end of life costs. For the main breadwinner in a family, it's going to be needed to replace some or all of the lost income due to your death.
People have life insurance for more reasons than you might think. Of course, they have life insurance so that their loved ones would have something to pay the bills for at least a while, until they can get back on their feet. They have life insurance so their kids can grow up financially stable in spite of the emotional trauma of losing a parent. They buy it for business purposes; to tide them over if a key employee dies; to provide money for a son to purchase the business from Dad if Dad dies; to pay the estate taxes. Life insurance is used to fund funerals, provide collateral for loans, and save up money for the policy holder's dreams. Those are just some of the reasons people have life insurance.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
People have life insurance to protect others that depend on them, i.e. beneficaries: family members, business partners and charitable organizations. Most people have financial liabilities, future obligations and some charitable intent. Life insurance can provide the protection to service these realities in case of the death of the policy insured.
Insurance Advisor, Lordship Insurance Services, California
There are as many different reasons for Life Insurance as there are people. Some of the common reasons include leaving something for your family, advancing charitable organization causes which you support and to pay off existing debts so as to not burden your family. Insurance covers the unexpected and can help a person to keep their own finances and use Insurance to cover expenses. Not everyone believes they need to have insurance so it must be an individual decision. However the cost of insurance is typically offset by the benefits it provides.
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Many people see Life Insurance is a legacy, a sign of caring, that they can leave to their loved ones. And if they don't see it that way, I worked in a funeral home for a few years, I have seen how their loved ones concur with that sentiment.
For a single person, it may be as simple as covering funeral, cremation or other end of life costs. For the main breadwinner in a family, it's going to be needed to replace some or all of the lost income due to your death.