Why Get Life Insurance

How Is Life Insurance Important in a Financial Plan?

Life insurance not only provides peace of mind to you and your loved ones but can be an essential part of a sound financial plan. As you grow and move through life you could appreciate the many benefits.

Importance of Life Insurance

Life Insurance as part of a financial plan

Financial planning is the process of meeting your life goals through the proper management of your finances. It includes elements of protection, wealth creation, planning for contingencies and emergencies, as well as planning for specific milestones in life. But where does life insurance fit in?

The fact is, life insurance life insurance is very much a fundamental part of a sound financial plan. And as you age, get married, buy a home, build a family, and plan for retirement, the more important life insurance becomes. The following are four common areas in which life insurance can play an integral part of your financial plan:

  • Paying off a mortgage.

    Payments, taxes, insurance and interest. For most people, a mortgage is one of their largest expenses. For this reason, most couples shoulder this long-term financial commitment together. But if you were gone tomorrow, could your family afford such a large expense without your income? A life insurance policy can help provide your family with a lump sum of money to pay off mortgage debt, eliminating this large financial stress, as well as the possibility of a loan default or eventual foreclosure.

  • A lump sum of cash for final expenses.

    The average North American traditional funeral costs between $7,000 and $10,000. If you were to die tomorrow, would your family have the immediate funds to cover your final expenses? Having enough life insurance in your financial plan can cover these costs, preventing your family from having to drain their emergency savings, tap into a retirement account, or being forced to take out a loan at this very difficult time.

  • Funding for college.

    The average cost at an in-state public college for the 2017-2018 academic year averaged $20, 770. A moderate budget at a private college averaged $46,950. If you find that you're struggling to set aside money for your child's education while you're alive, how would your spouse manage if you were suddenly gone? You can leave your children the gift of education by factoring educational expenses into your life insurance policy's death benefit. This can help relive the burden of struggling to accumulating college costs, ensuring the necessary funds for college.

  • Caring for a special needs child or aging parents.

    Life insurance plays a critical role in a financial plan if you have a special needs child or ageing parents that depend on your for financial support. Without the resources to provide for their continual care, family members will be forced to take on a stressful and lifelong financial burden. Life insurance proceeds can provide the financial support needed for these special individuals in your life.

If you want to know more about the role that life insurance can play in your overall financial plan or to calculate your needs, you can find additional information in the Protective Learning Center.

1. http://funeral-tips.com/funeral-costs-how-much-does-an-average-funeral-cost/

2. https://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2017-18 

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

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