While some people view life insurance as a luxury rather than a need, the truth is that life insurance can really come in handy during hard times. Whether you're in your early 20s with no dependents or are middle-aged with a family, you should consider getting life insurance. Read this article to learn more about how you can explore life insurance options for your needs.
What Is Term Life Insurance?
Term life insurance is a policy for a certain period. If you want life insurance for 5, 10, or 20 years, term life insurance is a good option. You may also find term life insurance much more affordable than permanent life insurance. Some term life insurance policies can be converted to permanent life insurance at the end of the term for the policy.
What Is Permanent Life Insurance?
As you can probably tell by the name, permanent life insurance is intended to last your entire life. A permanent policy does not expire. Also, the cost of the premium will not increase over your lifetime. Some permanent life insurance policies accumulate cash value so that you can withdraw or borrow from so that you can pay for your kid's college education or medical expenses. According to Suze Orman, “If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance.”
Tax Benefit
Life insurance plays an essential role in financial planning. The tax benefits come in multiple ways, including death benefits and living benefits. If someone dies, the beneficiary will not have to pay taxes on the death benefits because the death benefits is viewed as income replacement. Most life insurance policies are protected from taxation. Certain policies permit your money to grow faster and tax-deferred. In general, the money will not be taxed even if you withdraw it.
Cash Value
Many people view life insurance as a means to provide relatives with financial assurance when they die. However, in many cases, people with life insurance fail to realize that they can take advantage of it while they're living. Permanent life insurance serve as supplemental income. This form of life insurance is pricier than term life. However, you will be accumulating cash value. Also, keep in mind that you withdraw or borrow against from the cash value.
For more information about how to explore life insurance options for your needs, don't hesitate to contact us at (260) 925-1434.