The main reason most people buy life insurance is to replace income that would be lost with the untimely death of a wage earner. The cash provided by life insurance can help ensure your dependents are not burdened with significant debt when you die. Life insurance 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 no income tax is payable on proceeds paid to beneficiaries. Insuring a spouse is just as important as insuring the primary wage earner.
Many families are now two-income families and rely upon the income provided by a spouse.
Insurance on the spouse helps replace that income in the event of death or provides funds for housekeeping, child care or other services that now must be purchased. Term insurance provides protection for a specific period of time. It pays a benefit only if you die during the term. Some term insurance policies can be renewed when you reach the end of a specific period, which can be from one to 20 years. The premium rates generally increase at each renewal date.