Find out top answer reasons why member in life insurance company should purchase whole life insurance or term life insurance to protect their family and loved ones.
1. Income for Dependents
2. Coverage for Final Expenses
Funeral and burial costs can be expensive, but your life insurance can cover the costs. Carefully planned, it will also provide funds to cover mortgages and other expenses. Debts and medical expenses not covered by health insurance can also be covered by your life insurance. It offers protection to the dependents you leave behind, since it can sometimes be utilized as a cash resource.
3. Create Inheritance
Life insurance can allow you to create an inheritance for your immediate relatives or heirs. Even if you don't have any other significant assets to pass onto your surviving family or loved ones, you can create an inheritance by naming your heirs as beneficiaries in your policy.
4. Pay Estate Taxes
Rather than leaving your surviving family to take a smaller inheritance or do away with some assets, have a quality life insurance policy in place so the benefits can pay estate taxes. Some plans provide tax free cash that can be used to pay estate taxes and death duties.
5. Create Source of Savings
Your life insurance can become a sort of savings plan since some types of insurance can create a cash value that is available for withdrawal upon the owner's request. Another benefit of this "forced" savings plan is that the interest credited is tax deferred, and if the money is paid as a death claim, the interest can be tax exempt (iii.org).
6. Make Charitable Contribution
By naming a charity as a beneficiary of your life insurance, you can make a larger contribution than if you donated the cash equivalent of your policy's premiums. Donating a term life insurance policy allows you to deduct the cost of the premiums from your taxes. And, if you donate a whole life policy, you can deduct the cash value of the policy and the cost of the premiums. In both cases, after you die, the charity you select gets the insurance policy proceeds.
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