Life insurance provides a number of advantages to you, as the policyholder, and to your loved ones. It pays a set amount of money to your family if you die while the policy is in place. While it seems that simple (and really it is that simple), there are a few reasons to consider just why this is such a valuable investment.
It Meets Your Family’s Needs
If you are the breadwinner in the home, which means people rely on your income to meet their needs, having life insurance available resolves any concerns about what would happen if you died. It can provide enough financial support to your family to continue their same lifestyle.
The Money Arrives Fast and Doesn’t Face Taxes
The funds from the life insurance policy (called the death benefit) are sent to your loved ones within a few weeks of your death, in most cases. As a result, they do not have to wait long to get the financial support they need. There are no costs to them, either. No fines, no fees, and no taxes are paid out of the death benefit.
It Is an Easy Way to Add to Your Estate
Life insurance is not just for those with a family. It can also be a good way to leave behind an investment to your family after your death at any age (as long as the policy remains in place). This makes the policy work more as an investment for you.
It’s Inaccessible to Creditors
Death benefits cannot be used to calculate the value of your estate. The funds are paid to someone else. That means creditors cannot come after your family to pay your debts using these funds. They are meant strictly for your beneficiary’s needs.
Your Beneficiary Can Use Them in Any Way They Desire
The death benefit is sent to your named beneficiary. That person then is able to use the funds in any way they would like to. If you want more control over the way the funds are used, you may be able to establish a trust. The life insurance policy can fund the trust. You can name someone to manage the trust within your specific goals. This is an option for those who want to leave funds behind, for example, for very specific goals.
Life insurance offers various advantages depending on the type offered. Some forms of whole life insurance even provide you with benefits such as borrowing power, during your lifetime. Take a closer look at how it can help you.