Why is life insurance important?
Question: My company offers life insurance as one of their employment benefits. Should I sign up?
Answer: Life insurance covers the income potential of the insured. This death benefit replaces income that the insured would have earned in the event that he or she dies during the policy period. For many families, if either of the wage earners were to die unexpectedly, the lifestyle of the family would change dramatically. It is possible that the family goals, such as home ownership or college for the children, might not be attainable in the event of death of a bread-winner.
It is also wise to have life insurance to cover a stay-at-home spouse, since the death benefit can be used to cover the additional costs of childcare and other household expenses if that spouse passes away. For this reason, it is common for families to purchase life insurance for one or both spouses, which can provide some peace of mind.