When do you need Life Insurance?
In our Ask H Video Series, Green Marker is answering your questions on estates, taxes, insurance, wealth continuity, financial literacy and more.
To start-off our Ask H, we are sharing a 3-part series on the basics of insurance.
Question 1: When do you need life insurance?
When you have an obligation and you may die before you fulfill the obligation. For example
As a business partner, your insurance pay-out covers your shares so family can benefit
As someone who will have capital gains and other tax obligations, insurance will provide liquidity to cover taxes and other expenses
Question 2: How is your life insurance policy affect by marriage? divorce?
In marriage, your life insurance policy can cover:
Replace your income until you are at least retirement age, allows your kids to go to school
Take care of your family's cash flow needs
In divorce, your insurance pay-outs can cover:
Your alimony payments to the end of the term in the divorce agreement
Your child support obligations before your kids reach the age of 18 or 25 (as per divorce agreement)