Life insurance can be critical for financially shielding your family in the event of a disaster, yet many individuals do not have it. According to a survey conducted, roughly half of all American individuals do not have life insurance.
One explanation is that people believe life insurance is prohibitively expensive. When asked to determine the cost of a $250,000 term life insurance for a healthy 30-year-old, for instance, the majority of survey respondents estimated $500 per year or higher. In reality, the average annual expenditure is closer to $160.
Top Benefits of Life Insurance
Life insurance payments are not taxed
If you have a life protection policy and die while it is active, your beneficiaries will get a lump sum death payment. Life insurance payouts are not counted as income for tax purposes, and your recipients are not required to record the cash on their tax returns.
It’s quite easy to get a life insurance nowadays. You can get life insurance quotes online as well.
Your dependents will not have to be concerned about living expenses
Many experts advise carrying life insurance that is seven to ten times your annual salary. People who rely on your income should not have to worry about their living expenditures or other big charges if you have a policy (or policies) of that magnitude. For instance, your insurance policy may cover the expense of your children’s college tuition, eliminating the need for them to obtain student loans.
Final Expenses Can Be Covered by Life Insurance
As of 2019, the median average cost of a funeral that includes a viewing and burial was $7,640.
Due to the fact that many Americans do not have enough funds to meet even a $400 emergency bill, needing to pay for a funeral can be a significant financial burden. If you have a life, insurance plan your beneficiaries can utilize the proceeds to cover your funeral expenses without needing to dive into their own resources or use credit.
Some insurance companies provide last expense coverage. These insurances provide limited coverage and have minimal monthly rates.
Chronic and Terminal Diseases Can Be Covered
Many life insurance providers provide endorsements, also referred as riders, that you can attach to your policy to improve or modify your coverage. Under certain conditions, an enhanced benefits rider permits you to receive some or all of your death benefit. Some plans, for instance, allow you to utilize your death benefit while you’re still alive to pay for your treatment or other expenses if you’ve been diagnosed with a terminal illness and are projected to survive fewer than 12 months.
Your Retirement Savings Can Be Supplemented By Policies
In addition to paying death benefits, an entire, universal, or variable life insurance policy can build cash value. You can utilize the cash value that accumulates over time to cover expenses like as purchasing a car or making a down payment on a home. You can also use it throughout your retirement years if necessary.
A life insurance policy, on the other hand, should not be used in place of typical retirement savings. Furthermore, cash value life insurance is far more expensive than term life insurance, which does not have a savings component and only provides a death payment.