Income Replacement Through Life Insurance
Without a doubt, the most readily-identified purpose for life insurance is to provide for our loved ones. Most of this providence translates to income replacement, though there are some needs which reach beyond the replacement of forfeited income.
Usual purposes
What do most life insurance shoppers want to provide for their survivors?
- A standard of living. Life insurance can provide the daily necessities for your loved ones without the discomfort of uprooting and adapting to a new home or school.
- Child care. Every parent, wage-earner or not, would do well to have life insurance coverage. An adequate death benefit enables the surviving parent to either stay home with the children or hire a caregiver.
- Higher education. Shoppers who intend to fund their children's college expenses or send their spouse back to school had better include these expenses in the budget when calculating the needed death benefit.
Term life insurance is usually our recommendation for these needs because it is the most affordable type of life insurance. Moreover, these needs will be met in due course in the event that the insured individual survives into old age.
Additional purposes
Some shoppers use life insurance to create an inheritance or legacy for their heirs. In the event that a loved one is not a person but a charity, life insurance may be the most cost-effective way to bestow a chartiable donation.
To meet these needs, permanent life insurance may be better suited than term life insurance. You might consider single-premium whole life insurance.
