If you have a lot of financial responsibilities — like paying off debt, supporting your family, or simply living a comfortable lifestyle — planning for the future is essential. One part of any plan should be protecting yourself and your family in case of an unexpected occurrence, such as your death or disability. To do that, you may want to consider getting a life insurance policy. But is it really necessary? Let’s find out.
Guaranteed Payout
If you want to guarantee that your family won’t lose the home or car you left them after you pass away, you need whole life insurance. When you purchase a whole life policy, your beneficiaries receive a payout in the event of your death that is guaranteed to be paid in full—provided all premiums are up-to-date, and there are no outstanding loans. It’s an important way to protect your family and help ensure they’re looked after if anything should happen to you.
Income Alternative
Life insurance can be a great way to make sure your financial responsibilities are met if you should die. It gives your family the money it needs to pay for everyday things, like living expenses and preserving the family business. They can also pay for important expenses like a mortgage, childcare costs, college tuition, and more.
Your agent can help you tailor a whole life policy to meet your needs. For a small additional cost, you can purchase additional benefits, such as coverage, in the event that you become disabled.
Tax Advantage
A life insurance policy is a great method of passing down financial security to your loved ones. Your beneficiaries won’t have to pay any federal income taxes on the money you leave them.
Growth of Cash Value Guaranteed
A life insurance policy’s cash value grows tax deferred. This allows you to pay premiums with after-tax dollars—and later build upon your original investment through the tax-deferred accumulation of investment earnings. It can supplement your retirement income, help pay for your child or grandchild’s education, help you pay off a mortgage sooner, protect your other assets, and establish an emergency fund.
Possibility of Dividend
Purchasing whole life insurance has many benefits, including the opportunity to earn dividends. The board of directors may or may not declare dividends, but when dividends are awarded, policyholders have the option of taking them in cash, using them to offset their premiums, using them to buy paid-up additional insurance that increases their coverage and cash value or taking them in cash.