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Why Is Life Insurance Important?

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Purchasing a life insurance policy is important for anyone who has a spouse or young children who depend on them financially. However, life insurance can also help older adults better plan for their final expenses and burial costs.

6 reasons life insurance is important

When you purchase a life insurance policy, your insurance company agrees to pay a death benefit to your appointed beneficiary upon your death, assuming you fulfill the terms of your policy. 

Although your beneficiary can be anyone, policyholders commonly choose to have the death benefit go to a family member, business partner or dependent. Below, we examine six reasons life insurance is important.

1. It can help replace your income

If you are the primary earner in your family, losing your income can negatively affect the financial future of your loved ones. Even if you aren’t the primary source of income for your family, they may depend on you for domestic tasks and household needs, such as cleaning, cooking, laundry and childcare.

A life insurance payout can help cover these costs and help ensure your family’s quality of life is maintained.

2. It can help cover funeral and burial costs

The average funeral can cost between $7,000 and $10,000.[1] Without life insurance, your family would likely have to pay these expenses out of their own pocket. A life insurance policy can help give you peace of mind that your affairs are taken care of.

3. It can help pay off outstanding debts

Most of us have some debt, whether in the form of a mortgage, auto financing or credit card debt. If you were to die unexpectedly, your loved ones could be responsible for these payments, which could cause serious additional distress.  A life insurance policy can help pay for these debts.

4. It can help plan for your child’s education

If you’re a parent (or planning to be) you might want to make sure your children are afforded the best education possible. If you are planning to pay tuition and other educational expenses for your child or other dependent, life insurance can help cover these costs.

5. It can help keep your business afloat

Life insurance is important for business owners because it can help protect the business from financial loss, liabilities or instability in the case of an owner or business partner’s death. You can name a business partner a beneficiary to help them maintain the business and keep operations going.

6. It can help protect your retirement savings

Buying a life insurance policy can help ensure that your family doesn’t have to rely on your retirement savings for financial support. If you pass away unexpectedly and your family has to dip into savings, your spouse won’t have those funds to rely on down the road.

Having a life insurance policy in place will help allow your family to make the most of other savings opportunities and use those funds how they were originally intended. 

Get a life insurance policy quote today

A licensed insurance agent can help you explore your life insurance options and match you with a policy that makes sense for you.

Speak with an agent at 800-390-3019 for your free life insurance quote.

[1] Source: https://www.parting.com/blog/funeral-costs-how-much-does-an-average-funeral-cost/

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Agency services provided by AIG Direct Insurance Services, Inc. ("AIG Direct"), CA license # 0B57619 and AR license # 0100105378, a subsidiary of American General Life Insurance Company ("AGL"), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York ("US Life"), New York, NY, all members of American International Group ("AIG").
 
Policies issued by: American General Life Insurance Company (AGL), Policy Forms: ICC15-15532, 15532, 15532-5, 15532-10. Rider Numbers: ICC15-15200, ICC15-15201, 15200, 15200-10, 15200-35, 15201, 15201-9, 15201-10 and 15201-35except in New York where issued by The United States Life Insurance Company in the City of New York (US Life), Policy Form Number: 15532N. Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG).
 
Products may not be available in all states and product features and rates may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company. Each issuing insurance company is responsible for financial obligations of their respective insurance. For all companies mentioned, their financial professionals and other representatives are not authorized to give legal, tax or accounting advice. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant.
 
AGLCXXXXXX  ©2018 AIG. All Rights Reserved.

 

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