Life insurance has many uses for both individuals and businesses. Some common uses include:
Individual Uses
Funeral - Life insurance proceeds can ensure that there is enough money for proper funeral and burial expenses.
Debt - Personal bills, credit card debt, student loans, and personal notes can be covered by life insurance in the event of an individual's death.
Mortgage Protection - The proceeds of a life insurance policy can pay off the balance of a mortgage or provide an income stream to pay monthly mortgage or rent payments.
Income Replacement - In the event of an individual's death, life insurance proceeds can provide a supplemental income stream to ensure that the surviving family members are able to maintain the same standard of living.
Education - Life insurance proceeds can ensure that the education costs of the insured's children are covered.
Taxes - Federal estate and state inheritance taxes can be pre-funded using life insurance to preserve the value of an estate.
Donations/Gifts - An individual can use a life insurance policy to fund a donation to a charity or leave a gift to a family member.
Business Uses
Key-Person - A life insurance policy can be used to protect a business from the loss of income and profits caused by the death of a key employee.
Business Continuation - Life insurance can be used to fund a buy/sell agreement or stock redemption plan to determine enable a partner or group of employees to buy the business interest of a deceased partner.
Business Loans - Life insurance protection on a key employee or business owner can be used to pay off the debts of a business in the event of that individual's death.
Employee Benefits - Life insurance protection for employees is commonly included in company employee benefits plans.
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