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Do I need Life Insurance?

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Not everyone needs to own life insurance. Those who should have a policy include individuals with young children, support their spouse, own a business, support a disabled child or adult, have significant financial obligations, or have a large estate. Life insurance can help to take care of your loved ones in the event of your death and it can also provide immediate cash upon the time of death. Unless a person's estate is named as beneficiary the proceeds of a life insurance policy are not subject to probate which means the money can be received quickly with out a long probate procedure. Life insurance proceeds are passed on income tax free however they are not estate tax free. You might consider getting life insurance if:

• Your estate will owe significant debts and taxes at the time of your death? If your estate will owe large debts and taxes and a substantial amount of your assets are illiquid you might consider life insurance in order for that money to cover debts and taxes at the time of your death so your loved ones won't have to find the money elsewhere.
• Your estate is large enough that it will be subject to estate tax, life insurance could be a smart choice for you. Probate proceedings can keep an estate tied up for a significant amount of time after your death. The proceeds of a life insurance policy can help your family with their immediate needs while they wait for access to the estate from probate.
• If you have dependants such as children, a spouse, or other loved ones that depend on your income.
• If you own a business life insurance can help your beneficiaries in a number of ways such as: if you own the business alone the proceeds of life insurance can help to cover any cash flow issues if the business will continue being ran by someone in your family. If the business will be sold the proceeds from the life insurance can help the business stay afloat until it can be sold. On the other hand if you own a business with other partners the proceeds from the insurance policy can help purchase an ownership interest back from your estate.

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