Assurance of your family’s safety and financial security is your primary concern when you are present with them or when you are not in case of eventual or untimely demise preparing for the worst and ahead of time is a smart decision. But choosing the right means to secure your family’s finances is also important where life insurance policies are the best option.
With many options and types of life insurances available selecting the one that suits your need and your income, expenses, assets and liabilities is important. Death benefit is the most important aspect you must consider while comparing the different insurance and also the insurance rate. The insurance and outs of Life insurance policy: things you need to know before going for it –
Life insurance a permanent solution with assured death benefit
Permanent life insurance policies are always the right kind of insurance policies where one need not reapply or renew the insurance assuring death benefit at any given time. Life insurance is a risk free policy which is not subject to market risk unlike universal life insurance where the premium is not invested in bonds, mutual funds, etc
Life insurance policy as the name indicates is an insurance plan for your Life that provides insurance cover for the insurer’s Life. And upon eventual death or untimely death of the insurer the insurance amount is paid to the insurer’s beneficiaries.
Things you need to know about Life ins: Do you really need it?
You need a Life insurance policy or any other life insurance when you wish to provide a source of income to your family n your death which could either be eventual or untimely. Life insurance can be used to liquidate any of your debts or mortgages where upon your death your family members don’t have to pay as the insurance company pays off your outstanding debt and the remaining money is provided to your family.
Your child’s education is very important and it is your responsibility to see to it. And when you are not around your policy dies that for you by providing for all capital needs.
Funeral expenses, inheritance tax and administration costs always come up on a person’s death and by having a Life insurance all these are provided by the insurance money. It is the means that ensures financial support of your family where the cash is given to the surviving dependents.
Life insurance is a long term insurance which makes it a risk free and preferred insurance policy.
When you wish to maintain a fixed annual premium cost and for long term which is also affordable then Life insurance is the right policy that you need. It is ideal for split dollar arrangements and also a tax sheltered means of financing post-retirement health insurance.
Advantages of Life insurance policy
Life insurance provides the scope for accumulating cash value which is either tax free or tax deferred. The cash value also depend on the fact whether the gainsurance were distributed at death or the insurer’s lifetime. The cash values and also the dividend formulas are guaranteed and are higher when compared to tax free municipal bonds.
Lack of market risk: the cash value is not subject to market risk which is normally seen in universal insurance and other policies. The insurer can also use the policy as collateral to borrow loan at low interest rate.
The death benefit is not subject to federal income taxes and also the death benefit amount or the person to whom the amount is paid is also not subject to public record. In most cases the death benefit is either partially exempted or fully exempted from state inheritance taxes.