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Why You Need to Consider Purchasing a Policy

If you want to make sure that you can continue to take care of your loved ones even after your own passing, then purchasing life insurance is a must.

It provides financial support for your beneficiaries following your death. This essential financial protection can have serve several purposes:

Replacement Income

One of the primary purposes for having a policy is to serve as replacement income for dependents who might depend financially on you. Financial experts recommend purchasing enough coverage to payout an amount that, if invested at an annual 8 percent interest rate, would yield yearly interest payments that are equivalent to your annual income.

Death-Related Expenses

In today's world, even dying will cost you, and a well-funded plan can provide coverage of these final death-related costs. Such expenses can include costs associated with your funeral and any estate taxes that might be levied against your dependents' inheritance. It is estimated that a typical funeral could cost approximately $7,000, while being cremated can cost an average of $5,000.

Other Final Expenses

Another way this type of protection can assist your dependents is by covering any outstanding debts you might leave behind. Will you have any loans or credit card balances that will need to be paid? Will you have any medical expenses incurred shortly before your passing? This type of strategy can make sure that your loved ones do not have to pay your tab.

An Inheritance for Your Heirs

Do you want to ensure that your spouse can live a certain lifestyle after you are gone? Or do you want to make sure that your child can attend that Ivy League school you have always envisioned? If so, the product can ensure that enough funds are available to make these dreams possible.

Charitable Contributions

Many people dream of leaving a legacy after they are gone, and this strategy can help you achieve this goal. Through a well-funded policy, you can provide contributions to those charities that have always been important to you.

What Types of Coverage Can You Buy?

When shopping for a plan, there are two primary types of products you can purchase:

Term Coverage

The first type of product you can purchase is called Term Life Insurance. This type of plan pays only if the consumer's death occurs during the policy's term, which typically spans 30 years. You can purchase a "level" term product, in which the death benefit does not change throughout the duration of the agreement, or a "decreasing" term plan, in which the death benefit decreases over the course of the plan's term.

Permanent Coverage

The second type of plan you can purchase is called Whole Life Insurance. This type of protection will pay a death benefit no matter when the customer dies. There are three types of permanent policies: "traditional" whole life, universal and a variable universal policy. For more information about purchasing protection, check out http://www.mylifeinsurancetips.com/#.