Millions of Americans lack the protection that life insurance provides. A recent study found that 75% of Americans are hesitant about investing in life insurance. That means millions of people aren’t sure if they’ll be able to replace their income for their families in the event of their death.
There are plenty of sound reasons to invest in life insurance as soon as possible. In the article below, you’ll find five of the top benefits. Continue reading to learn more about whole life insurance and term life insurance options.
- Life Insurance Payouts Are Not Subject to Taxes
If you pass away and your life insurance pays out to your beneficiaries, it’s unlikely that your beneficiaries will have to report the payout on their income taxes.
This perk makes life insurance different from inheritance money. Keeping cash in an account and passing it on to your relatives as an inheritance could force them to pay taxes. With a life insurance policy, however, your beneficiaries will be able to keep the full amount.
- Some Life Insurance Policies Protect against Terminal Disease
When shopping around for life insurance, think about how you’d handle a terminal illness. Consider whether or not you’d be able to pay for the medical expenses and at-home care out of pocket.
If not, you may want to invest in life insurance with riders. Certain riders can make it so that life insurance pays out early in the event that you have a terminal disease.
If, for example, you receive a diagnosis that you have six months to live, you can use the life insurance payout to cover costs during those six months.
- Certain Life Insurance Policies Offer Cash Payouts
Many people aren’t aware of the fact that you can use life insurance as a way to save money for retirement. Some kinds of life insurance policies allow you to pay a higher premium but keep part of that money in a cash account.
This cash account will earn interest over time, and the taxes are deferred. You can usually take the cash out in retirement, which gives you some benefits of life insurance while you’re still alive. However, you will have to pay
- Life Insurance Can Replace Your Income
Anybody who is the sole provider for their household should seriously consider getting life insurance. In the event that you pass away while you’re receiving income, life insurance payouts can replace that income for your family.
Every life insurance plan is different, so be sure to check your plan to see how long your family can continue receiving benefits.
- Life Insurance Can Cover Your Debts
People who die with a lot of debt often put a burden on their families. Some types of debt do not disappear when you die. Your family will have to pay these debts, but life insurance benefits can help cover these debts.
Reviewing the Benefits of Life Insurance
As the article above shows, investing in life insurance is a smart financial move for various reasons.
Whether you’re investing in life insurance to provide for your family or to provide yourself with some funds in old age, now is a great time to move forward with your decision. If you’re in need of a life insurance provider, get in touch with the experts at Tom Needham Insurance Agency.