10 benefits of life insurance
Life insurance may seem complicated or confusing, but breaking down the reasons for life insurance will help make it more manageable. Life insurance is a valuable tool designed to help protect your loved ones after you pass away.
Your life insurance needs will depend on your budget and your family circumstances. There are several distinct types of coverage and advantages of life insurance that may help meet the needs of different individuals.
While benefits will vary depending on the type of policy you select, these are 10 of the most important benefits available to life insurance policyholders.
1. Coverage
All life insurance policies are designed to help protect your loved ones. Term life insurance policies may help protect your loved ones for the term specified in the policy. Whole life insurance policies may help protect your loved ones for your entire life. This coverage comes in the form of a death benefit. A death benefit is the money paid to your beneficiaries after you are no longer here.
2. Benefit payout
The death benefit is the payout your beneficiaries receive at your death if your policy is still in force. It may be able help replace the income that you provided for your family after your you pass away. The benefit from a life insurance policy can be used by the beneficiary to help pay off their debts including mortgages, school loans, and other debts. Benefits may also be used to cover funeral expenses or other debts you may leave behind.
3. Premiums will not go up on whole life insurance policies
As long as you pay your policy on time and do not let it expire, your whole life insurance premiums will not go up. For whole life insurance policies, the premiums are locked in at the age you get the policy.
4. The application process is simple
In many cases, life insurance applications can be done quickly and completely online. Often, the initial application may take no longer than a few minutes to complete. In some cases, a coverage decision may be made in minutes.
5. Whole life insurance accumulates cash value over time
If you get a whole life insurance policy, it will increase in cash value over time. You may be able to borrow against this amount to help with expenses or purchases.
6. Some insurance policies require no medical exams
Many insurance companies offer Guaranteed Acceptance Whole Life Insurance (GAWL). In seeking GAWL coverage, applicants are not required to receive a medical exam or to answer health questions, and therefore cannot be denied coverage due to any health issues.
7. Income-tax free
Life insurance payouts are generally income-tax free. Your beneficiaries will get the amount specified in the policy.
8. You may convert your coverage
If you get a term life insurance policy, you could switch to a whole life insurance policy to continue coverage beyond your policy’s term. It’s important to review your policy to determine if your policy is eligible to convert or when might be the right time to convert to a whole life policy.
9. Charitable contributions
Life insurance payouts can be used to make charitable contributions, so your loved ones may choose to support the causes that are important to them.
10. You could add riders to a life insurance policy
Many life insurance policies allow you to add riders to pay for long-term care, spousal support, or other special circumstances. Ask your insurance representative about available riders.
Exploring the key benefits of life insurance is the first step. You can weigh these benefits against your personal goals and financial needs. Then, you may want to consider specific types of policies. You can learn more about coverage options and get a quote in minutes from TruStage™.
