Sherrie Littlejohn: Hi! I am Sherrie Littlejohn with Wells Fargo & Company. Today, we're discussing why you need to consider buying life insurance. It's important that you help your family members reach their financial goals whether it's by helping them save more or making sure your loved ones are protected in the event of your death. Life insurance is an excellent tool to help make sure your family maintains the lifestyle they are accustomed to should you pass away. It's generally recommended that your life insurance coverage be 7-10 times your current income. If you have a large family, you may need even more coverage.
If your family or a loved one relies on your financial support, you should consider the value of life insurance to help take care of them after you are not there. There are many other reasons to consider having a life insurance policy such as tax planning, debt reduction, payment of medical expenses, taking care of funeral costs or providing for a charitable cause. That's important to you. Life insurance can be a useful tool in estate planning as well. It can also be used for business continuation purposes. You may want to talk to a financial professional about the details of how a life insurance policy can be used in a financial plan. Fortunately, it really isn't that expensive to purchase life insurance. Particularly, term life insurance.
Life insurance pays a predetermined amount of money to the beneficiaries listed when the policyholder dies. The funds are usually earmarked for specific purposes such as living expenses, debt reduction and payment of medical costs or final expenses. Having a properly designed life insurance policy in-force at the time of death can allow the family to focus on emotional healing without having to worry about financial issues.