The reason most people purchase life insurance is that it pays out money to their dependents in the event of their death. While this is the most important reason to have life insurance, the truth is it’s also capable of much more.

Read on to learn 6 of the most important benefits of owning life insurance. Leave us a comment below to let us know what you think, and which one could be the most beneficial to you. 

Benefit One: Protect The People You Love

Again, this is the primary reason people give for purchasing life insurance. After all, you put a lot of effort into making sure the people you care about have what they need. But what will happen to them after your passing? How they will be able to pay for items like your funeral costs, debt, mortgage, child care, or your children’s or grandchildren’s college tuition?

If you have a life insurance policy, they will receive a sum of money known as a death benefit to assist them with moving forward after you’re gone. Depending on your circumstances and needs, a term plan could be a good option. Or, if you want a more permanent solution, look into whole life or a universal plan. 

Benefit Two: Leave Behind a (Tax-Free) Legacy 

If you want to leave enough money behind to make a difference in the lives of loved ones or charities and causes that are important to you, life insurance could be a viable way to do it. And, because the death benefit is usually income tax-free, your beneficiaries will be able to enjoy every penny you leave them. 

Permanent, cash-value policies would usually be the way to go on this one. Speak to one of our wealth management advisors to learn what type of plan is best for your unique situation. 

Benefit Three: Create Additional Income

You’ll undoubtedly incur some significant costs throughout your life, such as paying for college tuition, your mortgage, or a serious emergency. As you get older and closer to retirement age, supplementing your income may also be a concern. 

Many permanent life insurance policies allow you to build up cash value over time. You are free to utilize it any way you see fit, including by taking out tax-advantaged loans against the cash value of your policy as additional retirement income. 

Indexed and variable permanent insurance plans are frequently utilized in income planning.

Benefit Four: Money for Unexpected Illnesses

Now more than ever, people are living longer. This is a great thing until you develop a chronic or fatal condition. Even if you have health insurance, medical costs and related expenses can be very high.  It’s crucial to consider how you could obtain the additional funds you might need. 

Many policies include living benefits that allow you to accelerate the death benefit while you are still alive in addition to tax-advantaged access to the cash value. This is money you can use for whatever you need it for. 

Benefit Five: Pay Less In Taxes

As the old saying goes, the only certainties in life are death and taxes. Life insurance helps with both! Along with leaving behind money for loved ones, life insurance offers tax benefits, both to the insured and to their beneficiary(ies). 

Both term and permanent policies will provide your beneficiaries with a typically tax-free death benefit when you die. While you’re living, you can take income tax-free loans from the cash value of your permanent policy.

Benefit Six: Protect Your Business

You business owners out there have a lot to protect, including your company, your staff, and your family. There should be as little of an effect on your firm as possible if you or one of your partners or key staff members pass away or becomes disabled. 

In the event this should happen, permanent life insurance can assist with business continuation. Additionally, it can assist in facilitating the transfer of business ownership in the case of your or a partner’s retirement, incapacity, or demise—without reducing the company’s capital.

Both Term and Permanent Plans can help. Schedule a consultation with us today if this is important for your business.

The Bottom Line

There are many benefits of owning life insurance. Our wealth management advisors are here to help you determine the right plan for your needs.

Contact us today to schedule a consultation!