Many people consider life insurance as an unnecessary expense and carry on without it. However, this is not the case, and life insurance is essential as it can safeguard your family’s financial interest after the tragedy of your sudden demise.
Surprisingly, half of the people in the country do not have a life insurance plan mainly because people believe it is too expensive.
If you seek consultation from a reputed insurance website like CharlaBrotherton, you will be able to find an insurance contract that will serve your needs while being affordable. Such agencies will guide and help you throughout the whole process of buying an insurance plan.
For instance, a $250,000 term life insurance plan for a healthy middle-aged person can cost as low as $160 per annum.
Some advantages of opting for life insurance are as follows.
The Payouts are Tax-Free
If you have an active life insurance policy and in case of your sudden demise, the mentioned beneficiaries in your insurance contract will receive the lump sum payout.
Such payouts are not considered an income from the beneficiaries’ point of view, so they do not have to file for taxes for the payout amount that they have received. This makes life insurance hassle-free for the beneficiaries, and they do not lose any amount to taxes.
Takes the Burden Off of Your Dependants
Any insurance consultant will recommend you opt for an insurance plan that gives out a payout of more than seven to ten times your annual to ensure the financial protection of the dependants after your demise.
Having a sizable payout takes the burden off your dependant’s shoulders to worry about living expenses and even some other major expenses. It could help cover the costs of your children’s college education or could help the family pay off any debts.
Helps Cover Funeral Expenses
On average, a funeral in the United States can cost a whopping $7000, making it difficult for most American families to cover since a large chunk of the population does not have ample savings.
Paying for a funeral can prove to be a major financial burden for the dependents of the deceased. Many people often use credit to pay for funerals and end up paying back a hefty interest.
Once you have sizable life insurance, the dependents can use that amount to pay for the funeral expenses.
Moreover, considering the needs of people, many insurance contracts offer coverage for final expenses, and you can choose them by paying a little more premium.
Offers Coverage for Chronic and Terminal Illnesses
Life insurance contracts offer an accelerated rider benefit which allows a person to access the death benefit payout under some special circumstance such as a terminal illness.
So, suppose an insurer is diagnosed with terminal diseases with only a limited time to live. In that case, the insurer can dip into the death benefit to cover the treatments costs and some other benefits.
This allows a person to use their death payout while they are still alive.
Supplements Your Retirement Funds
Variable insurance can accumulate cash value over time in addition to the death benefits. As the cash value increases over the years, you can take it out to pay for major expenses such as buying a car, paying for children’s college tuition, or a down payment for a home.
However, a life insurance contract can never replace traditional accounts like 401(K). On the other hand, a cash value life insurance can cost more than regular term life insurance.
No matter how old you are, it is never too late to opt for life insurance. It will safeguard your family financially, offer coverage in case of a terminal illness, and can even help you during your retirement.