Experts believe that people who buy life insurance to save money on taxes are missing the point, according to the International Business Times. These policies are designed to protect a person's family in the event that something tragic happens, the Life Foundation reports.
A person will pay money into a life insurance policy, and in return the company will make a payment to that individual's beneficiaries based on the specifics of the plan. Experts believe that a person should carry a minimum of 10 times their annual salary in life insurance, according to the news source.
Buying life insurance simply for tax reasons does not take into account how a person's family will survive if they die. If there is a one income family, and that breadwinner passes away, the family will essentially have no monetary support. That could mean vehicle repossession, or worse, housing foreclosure, the Times reports.
Life insurance should cover the needs of a person's family for the foreseeable future, getting a tax break should only be seen as a nice benefit, according to the news outlet.