There’s More to Life Insurance Than Most People Think. A Lot More

Of course, everyone generally understands that a life insurance policy helps provide protection for loved ones should you pass away. But, depending on how you plan it out, life insurance can specifically help with financial situations arising out of:

  • Family growth
  • Age
  • Occupation
  • End of life

Beyond being an asset in all phases of life, life insurance also can help with specific areas like:

  • Retirement
  • Taxes
  • Gifting
  • Estate planning
  • Business

Life insurance 101

To fully appreciate the range of life insurance capabilities, it’s important to learn about the different types of policies available. It’s also important to understand how to shop for insurance and consider what policy may be right for your circumstances and goals.

Types of life Insurance

  • Term insurance tends to be the most affordable and, consequently, the most basic type of life insurance policy available. It provides death benefit coverage for a specific period of time, often 10, 20 or years.
  • Permanent insurance , by contrast — including whole life, universal, and variable — offers coverage for a lifetime.
    Since many people start with term insurance, it’s important to understand its basics and how it can be built upon or combined with other types of insurance.

At the same time, since needs and resources change over time, it’s important to be familiar with the features of permanent insurance.

Life insurance and protecting loved ones

Life insurance protection is generally recognized as an important part of financial wellness. Yet, only about 52 percent of Americans own any, according to a recent study by the insurance research group LIMRA.1 And, even then, the amount of life insurance they have may not be enough.

Life insurance at different ages

There are also questions about the right time to get life insurance. Does is pay off to purchase a policy when you are younger, when it will likely cost less, or wait until you obviously need it? Answers can vary, but the question should be considered.

Life insurance and occupation

Many people own group coverage life insurance through their employer or other organization. In fact, 29 percent of American consumers overall own group coverage, according to LIMRA’s research.1 But oftentimes, such coverage may not be enough.

Life insurance and retirement

Beyond protection for your loved ones, some types of life insurance, particularly whole life insurance, can provide a way to accumulate a source of funds. Those funds may help you address some of the financial risks during retirement, such as market volatility or could be used to provide supplemental retirement income.

Life insurance and taxes

Whole life insurance and other types of permanent insurance offer tax advantages, like tax-deferred growth and tax-deferred distributions. Also, death benefit proceeds are generally tax free.

Life insurance and estate planning

Proceeds from whole life insurance and other types of policies have long been used to help heirs deal with costs and taxes that can apply to inherited property and assets. They also avoid the expenses and delays of probate and are not part of any public record. But, as the estate size grows, there can be pitfalls.

Conclusion and help

Yes, life insurance comes in many forms and can have many uses. Depending on your circumstances, the choices can get challenging and confusing. Many people opt to consult with a financial professional who can help them make informed decisions. Please contact us with any questions or for a complementary review of your current coverage and overall needs.

 

CRN202409-921090