Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can play an important role while:

1. Substitute cash for dependents
The most commonly known cases are of parents with young children. However, this income is also a god-sent alternative income for those who are in a tight spot with the bread-earner gone. Insurance to replace the income can be especially useful if the government/employer-sponsored benefits of the surviving spouse or domestic partner has been reduced with bread earner’s death.

2. Monetary arrangements
A life insurance policy can aid you to overcome the funeral and burial costs, other estate administration costs, debts and medical expenses which haven’t been covered by health insurance policy.

3. Leave them with head held high
You can create an inheritance by buying a life insurance policy and naming your heirs as beneficiaries.

4. Pay your taxes even after death
Life insurance benefits can help your survivor pay estate taxes so that they do not have to sell the assets or lose part inheritance.

5. Donate your life to a charity
Let a charity become your beneficiary rather than make a large cash contribution for the peace of your soul.

6. Create a source of savings
Life insurance has a “cash value”. In other words, it can be called as the sum that grows over the years with taxes deferred. Even when the policy is cancelled, the insured receives a lump sum. After retirement, some use it as an alternative income.