Buying a life insurance policy is a long-term investment decision. You are taking on a commitment to pay year in, year out. Why should you do it? If you are completely on your own right now, there is little need. You can live for today and let tomorrow take care of itself.

But if you have a family and they depend on your earning capacity, what will happen when you die? Will your partner or children be able to manage? If not, you need to replace your income until they can make other arrangements. The most important first step will be leaving enough to pay off all your debts. Look at your credit card bills, car loan, mortgage and all those other little amounts you borrowed. Then, although it is a morbid thought, will your dependents be able to pay for your funeral, and burial or cremation?

All this before we ask whether you want to leave a lump sum for them to live on and what you should plan to do about the “death” taxes that might force your family to sell some of the assets.

Thinking carefully about what your dependents will need to survive is the first step to planning for their future.

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