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Why
Do I Need Life Insurance?
There
are two basic and necessary reasons to buy life insurance. You
owe someone or
You love someone.
You
owe someone
- Last expenses
(Funeral and probate costs)
- Current
debts
(Auto loans, credit cards, etc.)
- Mortgage
or rent
(To pay off house note or ensure coverage of rent payments)
You
love someone
- College
education
- Income
continuation
Tax
Notes: Proceeds from an insurance policy paid because of the death
of the insured are generally excludable from the beneficiary's gross
income for tax purposes. (IRC Sec. 101(a)(1).) Income and growth
on accumulated cash values have been held by the Tax Court to be
generally taxable only upon withdrawal. (IRC Sec. 72.) Consult your
tax adivsor or attorney on your specific situation.
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