Most people understand the main benefit of life insurance: the family of the dearly departed get financial assistance, and you have the assurance that your family will be taken care of after you move on. There are more advantages of life insurance depending on the specific type of policy and coverage you have. Many families go without life insurance despite it protecting them financially in case of a tragedy. One reason is that people assume life insurance is too expensive.

Life Insurance Payouts Are Tax-Free

If you pass and have a life insurance policy, your beneficiaries will receive a large sum of death benefits. Life insurance payouts are not regarded as income for tax purposes, and your beneficiaries do not have to report it when filing tax returns.

Your Dependents Won’t Have to Worry About Living Costs

Experts recommend that people have life insurance equal to seven to ten times their annual income. When you have policy/policies that size, those who depend on you will not have to worry about their living expenses or other significant costs. For example, if your insurance covers the cost of your child/children’s college education, they will not have to take student loans.

Life Insurance Can Cover Final Expenses

In 2019, the national average cost of a funeral, including viewing and burial, was $7,640. Many Americans do not have enough funds to cover a minor emergency expense. Having to pay for a funeral can be a burden to them. A life insurance policy can help your beneficiaries pay for burial expenses without using their savings or credit.

You Can Get Coverage for Chronic and Terminal Illnesses

We offer endorsements, also known as riders, to add to your life insurance policy to adjust or enhance your coverage. An increased benefits rider allows you, under some guidelines, to access some or all your death benefits. For example, if you are diagnosed with a terminal illness and are expected to live for less than a year, you may need to use your death benefits to pay for medical care and other expenses.

Policies Can Supplement Your Retirement Savings

If you buy a variable, whole or universal life insurance policy, it can increase cash value and provide death benefits. As the cash value accumulates over time, you can use it to pay for expenses, such as making a down payment on a home or buying a car. You can also use it during your retirement years. A life insurance policy should not replace your traditional retirement account. Additionally, cash value life insurance is more expensive than term life insurance which involves no savings but simply death benefits.

Life insurance is not only for the rich or wealthy. Despite your income level, a life insurance policy can ensure your beneficiaries or loved ones make ends meet even with your absence. Life insurance can be more affordable than you think. If you decide to get coverage, do not hesitate to contact us for guidance or more information on a life insurance policy.

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