Life insurance provides much-needed funding when tragedy strikes, and being underinsured can be extremely risky. Some of the most common reasons to have life insurance include the following.
To Protect Dependents
If a spouse, children, or other loved ones depend on you, there’s a good idea to have life insurance….
If you’re a wage-earner in the family, your death would leave dependents without a vital source of income. The result could be a domino effect of financial hardships that last for years. This is because lost income makes it hard to save for goals like education.
Even if a family member does not earn an income, their death can have significant financial consequences.
To Pay for Funeral Costs
When somebody dies, there may be several expenses related to their death. In addition to any medical bills, you may incur final expenses, such as paying for a funeral, memorial, cremation, and more.
To Pay Off Debts
Life insurance proceeds can pay off debts that might otherwise leave your loved ones in a difficult position. Being debt-free provides significant relief if the household income drops or expenses rise from caregiving needs
To Protect Your Business
The death of a key employee or business owner can cause financial problems for your business, which is why many organizations use life insurance to manage risk.