If for only the reason why we never really know when we'll go, a life insurance policy makes a lot of sense for most of us. The premiums are typically low and affordable (depending on the coverage of the plan that you elect and the provider), and the benefits can be well worth it just for that added peace-of-mind. Taking out a life insurance policy may be practical for you if any of the following four perks it offers are of concern.
Final Expenses
According to Investopedia, life insurance has a longer list of benefits than burial insurance does, and is not limited to just your final expenses. A given example is that a person can often get a life insurance policy with much greater coverage at a similar or competitive rate to burial insurance, making it a more lucrative option for most people.
Shared Debt
Generally, families have an accumulated portion of shared debt. This involves common debts like a mortgage payment, car payment, student loans and credit card debt. But just because one of you passes away doesn't mean that the debt passes away with you. According to Legal and General, life insurance is most commonly used to pay off shared debts and to decrease the financial burden after the passing of a family member.
Preserving Lifestyle
What about the lifestyle that you have worked so hard to achieve during all of those years? Well if you are here today and gone tomorrow, it could change dramatically for the people that you love most. Listed as number two on the list of top reasons to take out a life insurance policy by Bankrate is preserving your lifestyle and income so that your family will have the necessary income coming in to do so.
Retirement Income
Lastly, don't overlook a life insurance policy as a viable retirement vehicle. A Think Advisor report says that you can actually use this as a way to set aside prospectively tax-free retirement income. This is due to the fact that the monies that you would be tendering to pay for the monthly premium have already been taxed, and therefore would not be subject to double-taxation were you to cash in on the policy's accrued value at a later date.
If you are considering taking out a life insurance policy, make sure you spend the time to conduct the necessary research first. You may find that a provider you are already using for auto or home insurance may offer the policy you seek with a group discount. Either way, do shop around and compare plans so you can be as prepared as possible with your end of life planning.
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