No one wants to think about death. And when we talk about life insurance that is what most people think of. However, besides protecting your loved ones in the event of your death, it can also do many other things while not breaking the bank. Check out these great benefits to life insurance:
1. It creates a sound financial plan.
Insufficient coverage has severe consequences for many families. Life Happens found that four in 10 households without any life insurance would have immediate trouble paying living expenses if their primary wage earner died. Life insurance helps with planning for your loved ones’ long-term health and happiness, providing you with peace of mind that your loved ones are financially protected.
If someone would suffer financially when you die, you need life insurance just like you need a savings or checking account. The money from the policy’s death benefit can help your family meet many important financial needs like funeral costs, daily living expenses and college funding.
2. It’s inexpensive.
Many consumers believe that life insurance is either too complicated or too expensive to consider. In actuality, life insurance is inexpensive and much more accessible that you think. For a healthy 30-year-old, for example, they can get a 20-year term life insurance policy with $250,000 of coverage for about $13 a month.
3. It can build cash value over time.
If you purchase permanent life insurance, it has a cash value, which means it can build more funds over time in addition to providing a death benefit to your beneficiaries. Just like most retirement and tuition savings plans, cash values can accumulate on a tax-deferred basis and be used in the future for any purpose you wish—a down payment on a home, college tuition or even income for your retirement.
4. Life insurance can be more for you.
Riders to a life insurance contract or a specific kind of policy, can enhance coverage. For example, you could have a life insurance policy, sometimes called a hybrid policy, that includes a long-term care benefit to pay for long-term care services. If this is something you need down the line, you can take advantage of it, otherwise there is a death benefit for your beneficiary. There are a number of different riders available that can help you customize and boost your coverage.
5. It can help with retirement.
If the financial obligations you had when you first purchased a permanent life insurance policy have ended, your policy can take on a new life and benefit your retirement. Structured correctly, your policy can provide supplemental retirement income via policy loans and withdrawals or even options for long-term care benefits.
Life insurance can also maximize a pension by supplementing a surviving spouse’s income, or established into a life insurance trust to allow you to pass on to your heirs outside of your estate (often avoiding both estate and income taxes).
Information from LifeHappens.org