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Consumers have many reasons to invest in life insurance

Posted On Thu, September 3, 2009

People who are wondering if they should invest in a life insurance policy may start by assessing their family's long-term financial needs.

The Insurance Information Institute recently offered consumers some pointers on the benefits of investing in life insurance.

For example, carrying a policy can help replace lost income for one's dependents, especially in a family that has young children or even grown dependents or parents. The organization notes that this is especially the case if a person has government or employer benefits that would be reduced or eliminated after one's death.

Other reasons for investing in life insurance are said to include paying off one's final expenses and estate taxes. The cost of funerals has continued to rise in recent years, while it remains to be seen what policies the federal government will enact on the estate tax after the current rules expire in January, 2011.

Also, a life insurance policy is seen as a way to allow greater financial flexibility when it comes to making final charitable contributions or leaving money to heirs.

Overall, industry experts have often suggested obtaining a life insurance policy that pays the equivalent of one's salary for five to seven years upon one's death.

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