When you buy life insurance, you plan for the worst and hope for the best. During this Life Insurance Awareness Month, consider the many reasons to own and periodically review this important financial protection.
BASIC PROTECTION
Life insurance in this country is as old as America itself, and it has roots going back to the ancient Greeks and Romans. Today, as then, life insurance is a way to minimize a family’s financial risk when their breadwinner is no longer here to provide for them.
Growing families, in particular, need the financial protection life insurance offers. From replacing lost income and providing money needed to pay off a home to funding childcare and lifestyle costs, life insurance can financially protect your family’s way of life if the unthinkable occurs.
Even retirees may want this protection if they still have minor children, have a disabled adult child or expect their beneficiaries will owe estate taxes. Life insurance, incidentally, is typically income tax-free.
LEGACY FUNDING
Beyond basic protection, life insurance provides a vehicle to achieve other financial goals. With life insurance, you can leave a financial legacy for loved ones or to a favorite charitable organization.
EXTRA INCOME
Policy owners with whole life insurance can potentially supplement their income with its cash value, although this can reduce the policy’s death benefit. Still, the tradeoff may be acceptable for a retired couple with smaller life insurance needs.
FINANCING TOOL
Business owners have long used life insurance as an efficient way to help fund buy-sell agreements between partners, to help fund family succession to the business and to equalize estates for family members who opt not to participate in the family business.
Talk to your tax professional to learn how life insurance can impact you and your family’s finances.