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Reasons to buy insurance are different for everyone. But the decision to purchase insurance is, at its core, all about providing financial security for yourself and the ones you care about.
Why is life insurance important?
Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses. Life insurance provides cash when you need it most. Your life insurance policy can deliver a specified sum of money when you need it. Upon your death, your family will receive your policy payout immediately. And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds directly to your beneficiary.
Reasons to Purchase Life Insurance
Life insurance can give you lasting peace of mind in terms of the assurance that you have provided a legacy. That’s because the right coverage can offer a valuable combination of benefits, so that you and your loved ones know exactly what you’re getting. Of course, you have to make a long-term commitment to paying premiums and keeping the policy in force. Some of the most common reasons for buying life insurance include:
Guaranteed Protection
If you have a family, a business, or others who depend on you, the life insurance benefit of a whole life policy acts as a financial safety net. When you die, your beneficiaries will receive a lump-sum payment that is guaranteed to be paid in full (provided all premiums are paid and there are no outstanding loans). It’s essential protection that you can count on to be there for your loved ones when needed.
Income Replacement
Imagine what would happen to your family if the income you provide suddenly disappeared. With whole life insurance, you can help make sure that your loved ones have the money they need to help:
- Pay the mortgage
- Afford childcare, health care, or other services
- Cover tuition or other college expenses
- Eliminate household debt
- Preserve a family business
Tax-Free Benefit
Your beneficiaries will be able to enjoy every penny you leave them. That’s because the benefit of a life insurance policy is generally passed along federal income tax free.
Guaranteed Cash Value Growth
As you pay your premiums, your Whole Life policy builds cash value that is guaranteed to grow—tax deferred—and can help meet a variety of financial goals:
- Supplement retirement income
- Fund a child or grandchild’s education
- Pay off a mortgage
- Protect existing assets
- Establish an emergency fund
Dividend Potential
One of the benefits of purchasing whole life insurance from New York Life is that you will be eligible to receive dividends.4 Although they are not guaranteed, when dividends are awarded, you can take them in cash, use them to offset your premiums, or use them to buy paid-up additional insurance that increases your coverage and cash value, use them to offset your premiums, or take them in cash.
Optional Riders
There are several ways to tailor a whole life policy to meet your individual needs. For an additional cost, you can use riders to purchase additional protection without further underwriting, to pay your premiums if you become disabled, to use some of your face amount to pay for chronic illnesses, or to purchase coverage for your children. Your agent can help you decide if any of these riders are right for you.
Reasons to Purchase Auto Insurance
Car insurance offers financial protection. If you cause a car accident, you may be held responsible for costs associated with it. These may include legal fees, the injured person's medical expenses or their lost income if their injuries leave them unable to work. Liability coverage may help pay for these costs. Without liability coverage (or adequate liability limits), you would likely have to pay these costs out of your own pocket.
Your lender or leasing agent may require auto insurance. If you're financing or leasing your vehicle, your lender may require you to purchase collision coverage and comprehensive coverage. Since the lender or leasing agent is the lienholder of your vehicle while you're making payments, these two coverages may help protect their investment. Comprehensive or collision coverage may help pay to repair or replace the vehicle if it's damaged in a covered loss. If you have gap insurance on your auto policy, this coverage helps pay off your car loan if the vehicle is totaled or stolen and you owe more than its depreciated value. Gap insurance is optional, and it typically works with collision and comprehensive coverage.
Car insurance can help protect you from the cost of repairs. Even if you own your vehicle outright, you may want to have collision coverage and comprehensive coverage on your car insurance policy. While mandatory liability coverage helps pay for damage to another driver's vehicle, it's important to have coverage for your own vehicle. For example, what if your car is damaged in a hailstorm? Comprehensive coverage may help pay for repairs or replacement if your car is stolen or damaged by something other than a collision, such as falling objects or fire. Or, say you accidentally hit a mailbox and damaged your car's front bumper. Collision coverage may help pay to repair your car if you hit another object or vehicle, regardless of fault. Without comprehensive or collision coverage, you would have to use your own money to get your car fixed.
Auto insurance helps protect your passengers. Medical payments coverage and personal injury protection may help pay for your medical bills if you're injured in an accident. It also may help cover your passengers' expenses due to the accident. This coverage may help pay for hospital visits, doctor bills and surgery.
Auto insurance helps you protect yourself. Even though liability coverage is a legal requirement, many people drive without it. Uninsured motorist coverage may help pay for your medical bills if you're hit by a driver without insurance. This coverage is required in some states and optional in others. Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. A car insurance policy may help protect your vehicle, your wallet and even offer peace of mind.
