The sale of Life Insurance in the U.S. began in the 1760s. The Presbyterian Synods in Philadelphia and New York City created the corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759.
1. Today people buy Life Insurance primarily for the very same reason – to protect their family from hardship in the event of their death.
Imagine that you own a home, and you have payments due each month for it as well as for a car, groceries, school supplies, power water and gas payments, and more. It is costing you $3,000 per month or more just to exist. The median family income in the U.S. is about $5,000 per month. What if the husband dies, who on average, is earning about $3,500 of that? Now the wife has an income of $1,500 to pay $3,000 per month. She and the children are in trouble!
That is the number one reason people buy Life Insurance.
2. It is smart. If you just want to save money, and that is a good thing to do, but buying Life Insurance is a better use of your money.
Here is an example: You are 35 years old, and you decide to save $100 per month for retirement, that accumulates $36,000 by the time you are age 65 plus a little interest. If you put the same $100 into a permanent Life Insurance Plan it would buy you $200,000 worth of Life Insurance or $300,000 of Term Life Insurance.
3. Avoid the tax monster. Life Insurance proceeds goes to your chosen Beneficiary or Beneficiaries, Tax Free, and avoids Probate.
4. Business Protection is another very popular use of Life Insurance.
Let us say that you own a business, and you have a partner. If you or your partner dies, then the business will probably suffer financially. Why? For the very reason that you took on a partner to begin with; you each bring specific skills to the business. Most likely the spouse of your partner does not have the same skills, but he or she now owns half of your business. You need to be able to find a new partner or hire someone who can function well to help you continue. You should already have a Business Buy/Sell Agreement in place, and you can fund that agreement with low-cost Life Insurance. Now your business continuation is protected.
5. Legacy or Heritage. Some people want to go beyond just covering the loss of their income for the people they care about. They want to leave money behind to really give them a blessing in their lives. Some will even form a foundation, funded by Life Insurance, to give each of their grandchildren a college education. They want to leave something to really help their extended family after they are gone. Another reason is to fund their favorite charity or church.
You can see there are many reasons for Life Insurance, and it is a very smart use of your money. Buy it as early as you can, simply because it costs less when you are younger, and because you can get a larger Face Amount for less money. Also, you are most likely healthier and can qualify for a Standard or Preferred Rate instead of the higher Rated Premium.
Contact me for a free consultation as to which plan makes the most sense for you.