Auto news on Youtube Feb 11 2019

You might wonder if you have a need for life insurance.

Maybe you've been presented with the opportunity to purchase a policy and you've asked yourself

is this something that I really need?

Or is it worth the premiums to me?

We're going to talk about some of the main reasons people choose to purchase

life insurance today.

The most common use of life insurance is to provide for those who are economically dependent

on a primary breadwinner if they were to die early.

A common example might be someone with a spouse and a couple of kids.

They want to make sure that if they die tomorrow, that their mortgage and any other debts are

covered, as well as perhaps a certain number of years of replacement income and tuition

and other costs for the child's education.

This is the meat and potatoes use of life insurance, the most common reason that most

people purchase coverage.

But there are some other reasons as well.

You might have assets that are illiquid.

Maybe a lot of investment properties and you'd like your heirs to inherit them without a

liability without needing to re-qualify for financing, for example.

Or maybe you would like to give a larger amount to charity than what your premium payments

would otherwise provide by giving the cash directly during your life.

Some people use life insurance to fund a buy-sell agreement.

If they are in business with a partner, a lot of people use life insurance to fund their

estate tax liability so the proceeds do not need to come out of the balance of the estate.

Another reason the people use life insurance is to couple it with another insurance need.

These are called hybrid policies.

So you might be looking at a life insurance policy that has the option to add coverage

of some other kind.

Long term care for example.

If you need both of those types of coverage it might be a good deal to try to find them

in the same policy.

Just be aware that they might not be as robust as purchasing them independently

as standalone policies.

There are some things to look out for though.

Be cautious of using life insurance as a savings or retirement vehicle inside permanent policies,

or purchasing coverage when you do not have a life insurance need because you may be in

a better underwriting situation now than in the future.

These can be costly strategies and you might want to examine all of your alternatives to

that type of approach to purchasing life insurance.

Look at all of your other options and financial strategies that may be a better fit for your

situation if you find yourself considering those options.

Thanks for listening today, and please come to Pure Financial for more information.