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Life Insurance Resources

The Purpose Of Life Insurance

Your need for life insurance will vary with your age and responsibilities. The amount of insurance you buy should depend on the standard of living you wish to assure your dependents. You should consider the amount of assets and sources of income available to your dependents when you pass away. Social security benefits, available cash and other sources of income and investments may not provide the standard of living you have in mind. Life insurance helps bridge the gap between the financial needs of your dependents and the amount available from other sources, is the amount to be provided by life insurance. Your agent or other financial advisor can help you with these calculations. The Internet, as well as many financial magazines, books and articles are available to help you as well.

Your Need For Life Insurance

One approach to determine how much life insurance one should carry is to analyze the various needs of the family in the event of the death of a wage earner. Life insurance satisfies a number of these needs by providing a fund that can be used to:

1. Pay off an individual’s last debts such as medical bills and funeral expenses
2. Meet estate taxes and other expenses in settling an estate
3. Provide life income for the spouse
4. Pay off a mortgage
5. Pay for the children’s education
6. Provide funds for retirement
7. Provide an income for the policyholder’s spouse to give the family time to readjust to a new standard of living
8. Draw interest to provide funds for some special purpose
9. Provide a monthly income until the children are grown and out of school

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