Choosing the right insurance policy can be stressful. You want to get the most value out of your dollar, find the most benefits, and know you have chosen the right provider. Probably the most critical factor is knowing that the insurance coverage you chose is going to help provide for your family.
This is why life insurance is so popular among parents so that their kids and spouse can be secure in the future. Life insurance is one of the best ways to help protect your family, and here are seven important ways it does so.
1. Protect Liabilities For Your Children
Instead of having to sell off assets and liabilities to help pay for college, life insurance policies can be used to take out money. You do not need to pass on or utilize a life insurance policy; many of them allow you to remove funds to help cover the costs of things. In particular, helping pay for your child’s college education instead of selling or refinancing your belongings provides this as a benefit.
2. Coverage is a Better Deal When You Are Young
Permanent life insurance is an excellent type of coverage to have, but getting term-based coverage young is also a great choice. When you are younger, the costs are lower because you have a reduced risk of illness or death, but it increases as you get older for obvious reasons. Both types of coverage are excellent choices for a young family that is just getting started because the coverage is cheaper, and it builds over time as you pay more into it over a longer period of time.
3. Leave Significant Finances in the Event of Tragedy
Probably the most important reason for life insurance is to help cover your family’s needs even after you pass on. Funeral costs can be expensive, and this information from Easy-Insured.com shows how life insurance is a valuable inheritance for your family post-death. Helping leave significant finances for your family to help with the mortgage, school, debt, or loss of secondary income is an important factor for why life insurance is so important for a family.
4. Create Another Source of Retirement Income
Retirement is the end goal after a long time of working, but retirement funds can be hard to come by. Life insurance can be used as another source of retirement income to help cover the costs of your golden years. Being able to confidently and securely retire knowing your policy and the money you put in can double as your fund is as good a reason as any to get covered, especially if your children are grown up and do not need help under your plan anymore.
5. Stay Protected in the Event of Sickness
Unexpected illness and sickness can strike anyone, so it is good to have a safety valve for when this happens. Getting blindsided by hospital bills and costs for treatment can be devastating for the family’s finances if they are not covered, so life insurance helps protect in this instance. Getting the proper coverage can help manage the financial aspect of serious medical issues for a family.
6. Provide Tax Benefits
Surprisingly, life insurance policies can offer some impressive tax benefits. In the event of a death, term and permanent tax coverage can provide a spouse with a tax-free death benefit, which helps cover costs, as mentioned earlier. Adding on to this, tax-free loans can be taken out of the policy based on the value of the coverage. Obviously, you can use this option while you are alive.
7. Pay Off Debt
The last reason that life insurance can help secure your family’s future is by helping eliminate debt. Whether living or dead, the insurance policy can be taken out and used as a way to help cover all kinds of debt. Helping get over student loans for your kids, pay off outstanding credit cards, and covering any financing or payments for a car helps provide tremendous relief for your family. Typically, paying off debt with a life insurance policy would be done after a member has passed on to help protect for that loss of income, but the point still stands that it can secure your family’s future quite well.
Life insurance is an important part of keeping your family protected in the event of tragedy or illness. These two are well known, but the other listed benefits surprise people when they consider getting life insurance coverage. This is a valuable way to protect your family from unexpected hardship.