In this week's SmartMoney Monday, we're going to discuss a really important component of your financial plan that can help families protect their loved ones: life insurance. We all know none of us are going to live forever. That's why life insurance is a really powerful tool that people can use to financially protect and provide for their family in the event of their passing.
When someone who is covered by a life insurance policy passes, their beneficiaries receive a death benefit that can help them pay their mortgage, ongoing living expenses, and even cover current and future educational expenses for the kids. That can relieve a lot of worry. When you have life insurance, you at least have peace of mind that your loved ones will be provided for.
But how do you know how much life insurance coverage you need?
You really need to speak with a financial expert to determine how much your family will need. They will look at your entire financial picture to make sure your policy takes your other savings and obligations into consideration. There are all kinds of policies and options out there, so finding the right life insurance plan for your specific needs and budget can be very doable.
Additionally, some people use life insurance to leave a legacy for their families. It can be a great financial tool that lets people leverage their hard earned money to leave a gift to their heirs. Plus, the monies that are distributed in a life insurance policy are income tax free to the beneficiaries. Life insurance protects against the unknown costs associated with someone passing, but can also be a financial planning tool to leave loved ones an inheritance.
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