Do you realize that there’s a lot that you don’t know about life Insurance? In this piece, we’ll be exploring a couple of options of what you can do with life insurance. Investing in a life insurance policy can help you meet many financial goals, but there are some things that the average person may not know about life insurance policies.
Life insurance is beyond protecting your loved ones and assets from the risk of future financial needs. There’s much more than most people know.
No worries, let’s do a rundown of all that is to know about life insurance;
1. Defray Long-Term Care Funding
One out of every three American will likely require long-term care in their lifetime, a very expensive necessity. For example, in the U.S., costs for long-term care average $54,000 a year, and it is projected that this expense will rise to $104,000 within the next decade.
Typically, you would need to pay for long-term care costs with your own money or with funds set aside by family members. However, life insurance can provide the required funding.
2. Transfer of Wealth
Life insurance can provide an income stream for your beneficiaries in retirement. A traditional life insurance policy will pay a death benefit in the event of your death. The beneficiary will receive this lump-sum payment in the event of the insured’s death. However, you can create an account value with a life insurance policy and allow your beneficiaries to receive income over time instead of just one lump sum.
Earnings created on this cash value can be used to purchase an annuity, an income stream for the insured’s beneficiaries upon their death. You can also use this income to buy a life annuity, which provides a fixed income for your beneficiaries during their lifetime.
3. Minimize Your Tax Liabilities
Many people have concerns about the taxes owed on their future retirement or investment income if they do not have a qualified retirement plan in place.
However, a traditional savings account has a very low-interest rate, and many people will not see any growth in their savings over time.
4. Facilitate an Estate Plan
Many tax benefits come with having a properly drafted estate plan. It is possible to transfer wealth to your loved ones after you pass away. You don’t want your beneficiaries to be taxed on gifts made from your estate after you die.
Life insurance can help reduce the costs of your estate and provide savings for those beneficiaries who would otherwise be responsible for paying taxes on those gifts.
5. Pay For College
If you have a child in college, life insurance can be a great way to fund their education. However, there are many different types of life insurance policies that provide coverage for college expenses.
In addition to paying for tuition, these policies can provide an allowance for living expenses as well.
Life insurance is an extensive term, and there are many different factors that you need to consider when choosing a policy. While life insurance can provide many benefits for you and your family, you should take time to research the different types of policies and consider what you want out of a policy.
Which one of these do you know? We’d like to hear about it at Tillman Insurance Advisors; you can shoot us a mail.