The Value of Life Insurance
Life insurance is a crucial step in planning for
your future and the future of your loved ones. It can
fulfill promises made to your family if you are no
longer around by providing a death benefit to your
beneficiaries in return for premiums paid to the
insurance company. Life insurance can also provide
benefits while you are living.
Advantages of the Death Benefit
- Provides income tax-free money to
your named beneficiary(s) that can be used to pay
funeral expenses, debt, tuition, estate taxes or
virtually any financial need you leave behind.
- Can provide business security by
enabling partners to buy out the interests of a
deceased partner and prevent a forced liquidation.
Advantages of Living Benefits
- The cash value growth of a
permanent life insurance policy is tax-deferred1,
which means you do not pay taxes on the growth of
the cash value unless the money is withdrawn.
- Loans
2
or withdrawals can be taken against the cash value
of a permanent life insurance policy to help with
expenses, such as college tuition or the down
payment on a home.
1Accumulated growth may be taxable upon
withdrawal. If the policy is a Modified Endowment
Contract (MEC), tax
penalties may apply prior to age 59 ½. Consult a tax advisor on your
specific situation. 2Policy loans and
withdrawals reduce cash value and the death benefit and
may be subject to other charges outlined in the
contract.
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