Life insurance is an essential element of every individual's financial strategy. However, most people avoid taking a life insurance policy, believing it is a financial burden they cannot afford. But, it is not true. A life insurance policy provides several financial benefits, the most prominent being creating a financial safety cover for your loved ones when you are no longer there.
Here are five undeniable benefits of having life insurance.
Cover your final expenses
Funerals can cost you a lot. A survey showed that an average funeral with viewing could cost about $7,640. Such an amount can be a substantial financial burden for your family, and they may even have to be indebted to fulfill it. However, if you have a life insurance policy, your beneficiaries can use the money to pay for the last rites.
Life insurance payouts are tax-free
Many people believe that the insurance money their beneficiaries would receive in case of their death is a taxable amount. However, the insurance sum they receive won’t be taxable, and they don't have to show it as a taxable income in their returns.
Financial support for your dependents
You may have dependent members in your family who would have no one to support them financially once you are gone. If you have such family members, experts recommend you take life insurance equivalent to 10 times your annual income. If you do so, your loved ones won’t have to worry about any significant financial issues after your demise.
Coverage for chronic illness
What if no one can benefit from your life insurance after your death? Then you don’t need to take life insurance, right? The answer is no. You should carry life insurance even if you have no beneficiaries or dependants. Many life insurance policies can help you pay for your medical expenses in case of any terminal illness. You just need to add specific endorsements to your life insurance policy.
Supplement retirement savings
A life insurance policy can also act as your retirement savings. If you purchase a universal or variable insurance policy, the accumulated cash value can be used for expenses such as buying a car or managing your down payment.
However, you cannot replace the other retirement benefits like 401(k) or an IRA account. The cash value life insurance is way more expensive and, in most cases, simply a death benefit.
Charitable contributions
You can also use the life insurance amount you get after your death to support a charity you believe in. You just have to name the charity as your beneficiary. This way, you can ensure that you support the cause you believed in, even after death.
About Choice Medicare
If you consider taking life insurance but don’t know which policy is the best for you, you have come to the right place. Choice Medicare is your one-stop destination for all your insurance needs. We also take care of your Medicare enrollment and find the proper medicare, long-term care, annuities, and insurance plans for you. You can reach out to us at 702.850.6824 or fill our online contact form to know more.
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