Compelling Reasons Why Life Insurance Is Important
You think bad things are never going to happen to you but recent events suggest otherwise. And a lot of people for whom life insurance never crossed their minds or who were stalling buying an insurance policy are adding life insurance to their financial plan in increased numbers.
If that doesn’t convince you, here are three compelling reasons why life insurance is important for you and your loved ones.
It protects your family’s well-being.The last thing you want your family to worry about if you should die unexpectedly is money. Life insurance eases stress and maintains your family’s standard of living by paying off debt and covering living expenses. It also can cover burial expenses, which cost on average about $9,000.
Best of all, most death benefit payouts are tax-free.
And even if you aren’t the primary breadwinner but the primary caretaker of children and day-to-day household activities, life insurance can help your surviving spouse with childcare and daily household maintenance costs.
Life insurance can also cover your mortgage and educational expenses.
Finally, insurance companies pay out faster than estates, which take time—and sometimes money—to process.
It provides financial security.Some life insurance policies provide investment opportunities that can enrich your retirement savings and provide cash value for college tuition or home improvements.There are also riders that add extra protection should you suffer a disability or terminal illness.
A disability rider can be bundled with your life insurance policy for added protection in the event you can no longer work. And an accelerated death benefit covers the costs of medical care for a chronic or terminal illness.
If you’re a business owner, life insurance can protect your business partner or loan co-signers by paying off debt and covering the costs of daily operations such as payroll, inventory, etc., which is a less expensive option than borrowing from a financial institution.
- It alleviates taxes. Most policy proceeds are tax-free, but if there is a tax liability, there are policies that can alleviate the tax burden on your heirs such as your children, grandchildren, or a favorite charity.Unlike an estate inheritance, 401K, or IRA, life insurance policy payouts are tax-free for owners whose estates are valued at less than $12 million.
Additionally, dividends from permanent insurance policies can earn tax-free dividends, which offer a steady stream of tax-free income with its accumulated cash value for use while you’re still alive.
Although life insurance is available at myriad price points even the most modest payouts buy time for those you care about to figure out what to do next in the wake of their loss.
And no matter how much life insurance you choose to purchase, you can’t put a price on the peace of mind it provides.