A life insurance policy is a contract under which the insurance company promises to pay a benefit upon the death of the person who is insured. The death benefit is generally provided income-tax free to beneficiaries.

What Needs Can Life Insurance Meet?

The primary function of life insurance is to provide death benefit protection. Additionally, these death benefit proceeds can help meet various financial needs in tax-advantaged ways:

• Transfer wealth through estate planning (note that the death benefit may be included in your estate for Federal estate tax purposes)
• Continue a business, protect a business, and provide benefits to key executives
• Provide short-term death benefit protection
• Replace lost income in the event of death
• Help supplement retirement income in cases where contributions to a qualified plan are no longer possible

Who Should Consider Life Insurance?

• Young couples with or without families
who need to replace lost income upon a spouse's death
• Anyone with a growing family
• Anyone who needs short-term death benefit protection and has temporary financial obligations, such as mortgage payments, car payments, or short-term debts
• Wealthy individuals who want to help preserve their estates for future generations
• Business owners who want to help ensure the continuation of their business