Many Americans ask the question – why buy life insurance? There is medical insurance, car insurance and fire and theft; do we need an additional insurance? The reason for life insurance is to provide money for burial expenses, which may not be available to the family at the time a death occurs. There are so many expenses to think of when someone dies. The added burden of the cost of funeral homes and cemetery and cremation services can be over the top. Most people are just not prepared to take on this additional expense.
Why buy life insurance is a question that can be answered in this way; we buy life insurance to provide some kind of financial support to the beneficiary of the policy. This is especially important if the deceased was the sole or principal breadwinner of the family.
There are several reasons in addition to those mentioned above. There are so many policies that it is important to talk to a financial adviser who can help sort out the different plans to find the right one for your family. Life insurance can help pay up debts, provide money for college, or supplement retirement income. However, do not be fooled by an agent who says to buy life insurance as an investment. This is illegal in the USA. A life insurance policy is concentrated on burial expenses and other expenses. It is not a true investment plan like the 401(k).
A universal life insurance policy can provide a cash option when you really need it. This is a good incentive for people who ask why buy life insurance? Medical insurance is great to meet some of your health needs. Chances are it will not cover all. A life insurance policy with a cash back option may help buffer extreme medical costs that are not covered by your health insurance policy. Also, if you are going through a tough period financially you can use the cash back option to pay your premiums until you get back on your feet. This avoids the cancellation of the policy; therefore, leaving you without protection.
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