Life insurance is an essential part of the financial planning process.
This is especially true if dependents rely on you financially. The main reason people buy life insurance is to replace the income that would be lost with the death of a wage earner. The life insurance proceeds can also help ensure that your dependents are not burdened with significant debt upon an insured person's death. These proceeds could mean your dependents won't have to sell assets to pay outstanding bills or taxes. An important feature of life insurance is that death benefits are not subject to federal income taxes, and, if set up properly, it can be estate tax free when desired.