Common Uses for Life Insurance

What’s the point of life insurance? A common question. To answer this, we have provided a list of the most common reasons people like you decide to insure their life:

1. Pay for childcare expenses

Did you know that it costs about $300,000 on average to raise a child to age 18?¹ If you were to pass on, would your spouse be able to take care of the kid(s)? With life insurance, the death benefit can be used to help cover any childcare expenses.

2. Fund your kids’ college tuition

University tuition along with room and board costs is outrageous. Regardless, education is still very important, and you likely want to support your kid(s) going to college, but how will you support them if you pass on? With life insurance, you could cover their tuition even if you are no longer around.

3. Protect your future

Are your retirement plans dependent upon your spouse’s income and social security? If so, then your plans could be in real danger if your partner passes—on top of a tragic heartache. Purchasing a life policy for both you, and your partner, can help protect your plans for the retirement years.

4. Pay off debts (credit cards, college loans, mortgage loans, etc.)

Just because you die doesn’t mean that your debts get buried with you. In the instance that your spouse or someone else cosigned on the mortgage or other loans, they must take responsibility for the remainder of the repayment—a responsibility they may no longer be able to afford. Life insurance helps those you love when taking care of any lingering financial commitments.

5. Leave a tax-free legacy gift (lump sum) to people you love

Want to make sure that you leave behind something substantial to those you love? With life insurance, you could leave behind more funds than you would typically be able to due to the large TAX-FREE death benefit purchased with your premium dollars.

6. Have access to money in case you get sick

Has a future threat of a life-threatening illness ever crossed your mind? Sadly, the treatments for these perceived sicknesses cost an outrageous amount of money. However, with the critical illness rider, you may have access to the death benefit of your life insurance policy to cover your expenses!²

7. Retain standard of living with income replacement

If your family relies on your income, they’ll need money to care for themselves after you’re gone. The death benefit can cover your salary and your other contributions to the household. Without your, or your spouse’s income, your family may be forced to move to a new home and a lower standard of living. Life insurance can help guard against this outcome.

¹ Brookings Institution. “It’s Getting More Expensive to Raise Children. And Government Isn’t Doing Much to Help.

² Offered through Securian.