Benefits of Life Insurance
June 22, 2023
June 28 is National Insurance Awareness Day, and we want to help you make the best-informed decisions about such an essential part to protecting your family. Here are the 5 top benefits of life insurance:
Life insurance payouts are tax-free
If you pass while your life insurance policy’s coverage is still in effect, your beneficiaries will receive a lump sum death benefit. These are not considered as income for tax purposes, meaning your beneficiaries will not have to report that lump sum when they file1.
Your dependents can worry less about living expenses
Many experts recommend having life insurance that is equal to seven-to-ten times the amount of your income. With this, your dependents reduce their worries about their living expenses or other major costs.
Life insurance can help cover final expenses
The national median cost of a funeral in 2021 was $7,848. Having to pay for a funeral can become a significant financial burden. With a life insurance plan, that money can be used to pay for your burial expenses, meaning your beneficiaries may not have to dip into their own savings.
You can get coverage for chronic and terminal illnesses
Many life insurance companies offer endorsements (aka riders) that you can add to your policy2 to enhance or adjust your coverage. With an accelerated benefits rider, you can often access some or all of your death benefit under certain circumstances.
Policies can supplement your retirement savings
Whole, universal, or variable life insurance policies can not only provide death benefits, but also potentially accumulate cash value that builds over time and may help cover your other expense or be tapped into during retirement3. However, a life insurance policy should not be relied on to replace traditional retirement accounts.
Life insurance can help protect your loved one’s financial stability should you pass away and can be more affordable than you think. We want you to feel well informed and confident in your life insurance policy, giving you greater assurance that the ones you loved will be cared for no matter what. Contact our office today by replying to this email or by clicking the link below to schedule your complimentary appointment with us. We look forward to helping you!
Read more about the top benefits of life insurance here.
1. Life insurance death benefits are generally tax-free to a properly named beneficiary. Life insurance agents do not give tax advice.
2. Optional riders may involve an additional annual cost.
3. Policy loans and withdrawals will reduce available cash values and death benefits and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change. You should consult a tax professional.