Enrolled Agent-licensed to practice before the IRS, Samuel N Smith, EA, South Carolina
Life insurance is one of the investments that allows an individual to trade a low monthly ;payment for a life insurance policy that has a protection amount that is much higher than my monthly payment. If my monthly payment is $100 month and I have a policy of $500,000 do you consider that money well spent. The Life Insurance policy can aslo enable tax managment strategies if it is a "cash value" policy". The "cash value" builds and as long as I do not withdraw the earnings it is not taxable. So if I have had this policy for 18 years and my "baby" is now grown and driving my Subaru and needs money to go to college I can pull the cash value at intervals that allows me to minimize my consequences and my "baby" slides off to college. Is that a good "investment vehicle"? Life Insurance also enables Estate Planning strategies enabling me to pass assets to my children without huge tax consequences.
People obtain life insurance for many reasons. Probably the most common one is to provide for their family if they should die while still having financial responsibilities that will be left to survivors to shoulder.
Some people buy business insurance to cover their key employees, so that their business would not go under if their best performers died. Or an adult child might purchase business life insurance on the life of their parent, so that they have enough money to buy their share of the business from spouse, investors, or business partners, if their parent died.
Life insurance can be used to provide money for estate settlement costs/taxes, to pay for final expenses such as funeral and travel for out-of-state/country family, to pay off a mortgage, or to provide collateral for a loan.
The tax favorable status of life insurance, the advantage that the proceeds are paid quickly and usually bypass probate, and the fact that you can choose your own beneficiary, all contribute to the appeal of life insurance.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
Folks buy life insurance for quite a number of different reasons but the bottom line is that they all want to pass on a financial legacy. Spouses obtain Life INsurance for the first time when they buy their first home because they want to make sure that their susviving spose and family will have the security of that roof over their heads. Business partners obtain Life insurance in order to protect their financial investment in their business and to be sure that it will continue if something happes to one or the other. THese are just two examples.
President, Lane Independent Agency, Southern California
There are many reasons for Life Insurance. The obvious is to ensure your family has money to carry on when you are gone. It protects your spouse, your kids, and others you love. Also, Whole Life can grow in value and shelter your funds from taxes, while allowing you to take funds out to pay for emergencies or whatever else you desire. It also avoids Probate, saving money and time for your family.
Insurance Advisor, Lordship Insurance Services, California
I can give you more reasons for why people buy life insurance than we have space on this website. Insurance is an integral part in any financial plan developed to protect people. Many people get insurance to transfer the risk of possible loss to the insurance company so that they can hold on to their own assets. In the event of a major illness or untimely death life insurance can provide peace of mind for those still living.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
People buy life insurance because they love someone else. They recognize that they have human capital and if they continue to live those that they love will benefit from their income and presence. Life insurance can replace some of the loss of income should death suddenly shorten that loving relationship. People also buy life insurance because they have an obligation to perform.
That is a great question! People buy insurance to protect things. Health, their car, and their belongings, we buy policies to protect all of these things. We buy life insurance for the same reason - in this case, to protect those we love and leave behind from being left without the money to care for themselves, or provide for our funerals. We buy it to protect our peace of mind, knowing that our loved ones won't suffer the loss of their financial security, as a result of the loss of us. It's one of the most important things that we can do for them. Thanks for asking!
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Some people buy business insurance to cover their key employees, so that their business would not go under if their best performers died. Or an adult child might purchase business life insurance on the life of their parent, so that they have enough money to buy their share of the business from spouse, investors, or business partners, if their parent died.
Life insurance can be used to provide money for estate settlement costs/taxes, to pay for final expenses such as funeral and travel for out-of-state/country family, to pay off a mortgage, or to provide collateral for a loan.
The tax favorable status of life insurance, the advantage that the proceeds are paid quickly and usually bypass probate, and the fact that you can choose your own beneficiary, all contribute to the appeal of life insurance.