Life insurance

 Life insurance can be a vital tool for financial planning, but finding coverage that meets your goals and budget can be challenging without guidance. Don't worry. A few simple steps will help you focus on the essential aspects of buying a policy that fits your needs.

Yes, life insurance is useful but it is not necessary for everyone. Consider purchasing a policy if any of these conditions apply to your situation.

• Someone depends on you financially and would likely still need significant financial resources after your death.
• Your estate won't have enough liquid assets (cash, investments, property, or other saleable items) to cover its taxes and debt, eroding the inheritance you plan to leave behind.
• You wish to cover your funeral and burial expenses at least so that your assets remain intact for your legacy and heirs. 
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Otherwise, it is possible you don't need life insurance. You may also consider life insurance as a viable strategy to leave a charitable legacy for a cause you support.

This part of the process can be daunting for many people, but it need not be. Take a quick snapshot of your finances and answer the following three crucial questions:

1. What financial resources will be available to your survivors or heirs after your death? Look at three primary categories of resources:

• Social security and other retirement-related survivor benefits;
• group life insurance (e.g. a policy you may have through an employer); and
• other assets and financial resources

2. When will these resources become available? For example, social security survivor benefits are payable immediately to a surviving spouse if there are dependent children. If not, social security may not be available to your spouse until after age 60.  

3. Determine what your survivor's financial needs may be after your death. For simplicity, you might focus on three categories of requirements: final expenses, debts, and income needs.

Source: www.iii.org