The Best Reason to Buy Life Insurance
Life insurance is a very versatile product in the hands of experts. “There are a number of ways life insurance can be used to replenish the estate to cover various taxes as well as create wealth,” notes Evan Jehle, partner, Rothstein Kass Family Office Group. Nevertheless, while many advanced planning strategies incorporating life insurance are viable for some individuals, across the board, there’s only one certain reason to purchase life insurance.
Why should you buy life insurance?
You should buy life insurance when you care deeply for someone or want to make a difference in the world, and your financial resources aren’t able to fill the financial gap if you were to die.
There are people you love, your children, for example. You want to ensure they have a solid financial base (however you define it). The best answer is very often life insurance.
For some people, the proceeds would be used to pay estate taxes. This translates into the children or other loved ones having monies that would otherwise be owed to the government. Business owners, for example, regularly use life insurance to fund buy/sell agreements. Again, this ensures their families are going to get appropriate value for the efforts they’ve made to build a business.
Many people want to do something consequential, which entails supporting worthwhile charitable causes. “A number of our clients incorporate life insurance into their overall charitable giving strategies,” notes Jennifer Santaniello, partner at Abrams Fensterman. “This way they can be sure they can fulfill their commitments to the philanthropic organizations they believe in and support.”
A lot of people complain about having to pay the premiums. And, their complaints get louder and more persistent as the years go by and the premium payments add up. The premiums adding up are a really good thing considering the alternative. “The objective is to lessen future financial burdens when someone dies,” explains Frank Seneco, president, Seneco & Associates. “It’s to deal with unexpected and definitely unwanted situations.”
There’s no question that capable professionals can provide very sophisticated ways of using life insurance in a number of scenarios. Sometimes acquiring life insurance is the best option, and at other times it isn’t. Nevertheless, when you care deeply about someone, or there’s a charitable cause that’s very important to you, and your death will deprive them of the financial resources you want them to have, the answer is life insurance.