Select the two reasons you feel are most persuasive and write a short (approximately 1 page) explanation as to why these reasons should persuade someone to buy life insurance as a young adult.

10 reasons to get life insurance

Life insurance is a more important component of your financial planning than you likely realize.

Life insurance can be an important part of your financial planning. Many dont even know why they might need life insurance. Luckily, there are tools to help answer your questions about this important decision.

In order to determine how much life insurance you may need, its a good idea to know exactly why you are buying it in the first place. This legal contract between an insured and an insurer, usually a life insurance company, requires premiums and guarantees a payment given to the insureds named beneficiary upon his or her death. But insurance proceeds can go toward a number of financial obligations. Check out the reasons you may want to consider purchasing life insurance.

No. 1: Income replacement

If you are a breadwinner in your home, insurance can help pay the bills or offer savings potential when your income is no longer coming in.

No. 2: Final expenses

With funeral and burial costs totaling more than $10,000, the death of a love one can leave quite a financial burden. Life insurance can help subsidize or cover these and other medical costs.

No. 3: Estate liquidity

When an estate is inherited, there are many taxes your beneficiary will have to cover. From paying income taxes to federal estate and state inheritance taxes, insurance policies can provide some help.

No. 4: Locking in a low premium

Premiums increase as people age. To optimize benefits, buying life insurance at a young age can lock in a low premium.

No. 5: Transfer family wealth

Life insurance policies can allow you to leave more money to your family as part of your estate.

No. 6: Build cash value

Whole or universal life policies offer a tax-advantaged way to build cash value.

No. 7: Cover debts

A life insurance policy can help pay off a mortgage loan so beneficiaries can continue to live in the home or to remove the immediate need to sell it. Debt can be inherited, and then follow your family around for years if they have to go into foreclosure or even declare bankruptcy. You can see how your debt is currently impacting your credit scores for free on Credit.com.

No. 8: Business succession

For a family business or otherwise, the continuity and succession may require costs like a stock redemption buy/sell agreement or cross-purchase. To protect your descendants and your company, life insurance can provide important funds.

No. 9: Tax benefits

Especially for high-income earners, policies can provide a tax shelter and alternative to IRA options.

No. 10: Charitable gift

A life insurance policy can help make a big impact to a cause important to the newly deceased. This could be done by donating the policy to charity or by naming the charity as beneficiary.

Once youve decided you need life insurance, its a good idea to research options and compare policies to meet your needs.