Search Blog  

Newsletter Subscription
* indicates required field

Blog Archive

The Top Benefits to Having Life Insurance


Lifestyle Improvement

Posted On: Jan 17, 2015

life insurance advantage

If you’re married, have children, or have anybody else that depends on you for income or care, it’s a must to have life insurance. Even if you’re single and your children are grown, you have to consider the cost of final expenses, like a funeral and viewing, plus any debts that you might have to be cleared up. So life insurance is pretty much a must-have for just about anybody. But did you know that there are other benefits to having life insurance that we don’t think about? Let’s take a look at some of the top overlooked benefits to having life insurance.

  1. It’s tax-free. For the most part, death benefits paid out to the beneficiaries are exempt from income taxes. This means that the beneficiaries will have the bulk of the benefits to pay for final expenses or help with financial stress of lost income.
  2. You can borrow cash from your policy. Many, though not all, life insurance policies allow to you take out a loan from the cash value to help with retirement funds, pay off other loans, or to access emergency funds. The amount of available funds goes up as the policy matures. So it might make sense to borrow against the policy when you get older and have less responsibility to your beneficiaries.
  3. Life insurance is flexible. If you get the right policy, you’ll find that it is actually very flexible to modify to your current needs. It’s possible to increase the death benefit at just about any time and you can adjust your premiums to fit with your current financial situation.
  4. It’s protected from market fluctuations. Unlike a 401(k) or other retirement funds, a life insurance policy will never lose value when the stock market takes a nose dive. This means that you will always have access to your funds whether you need them now or save them for your beneficiaries.
  5. There are no penalties for withdrawal from a life insurance policy. Another advantage of life insurance over IRAs and other retirement tax shelters is that you’ll never need to pay a penalty for an early withdrawal. Because your life insurance is exempt from income taxes, you won’t have to pay back taxes on what you withdraw.
  6. You’re guaranteed coverage. As long as you keep up with the premiums, you’re guaranteed to have coverage for the rest of your life. Even if your health changes, you’re still locked into that coverage. So buying a policy when you’re young and healthy is a great way to protect yourself and your family now and give your retirement portfolio a boost later in life.
  7. It can offset the cost of estate taxes. Even if you have a comfortable amount of wealth to pass on to your heirs, a life insurance policy can help lessen the impact of the estate taxes they will need to pay on their inheritance, leaving more of your estate for them.