According to Simple Life Insure, 80 percent of consumers think life insurance is more expensive than it actually is. But life insurance is more affordable than you might think and, in most cases, you won’t need a physical exam to get it. The majority of Americans don’t have enough life insurance, which can spell trouble when disaster strikes. Consider the following five reasons why you should absolutely invest in life insurance.
1. It’s Tax-Free Until You Withdraw
One of the major advantages life insurance has is that, in some cases, you don’t have to pay taxes on the money you pay towards your premiums, as long as you pay them on time and don’t let the policy lapse. Another plus is that your money earns interest with every premium you pay as long as you keep the money in your account. So the more you contribute and the longer you keep it in the account, the more your survivors will have to cover burial expenses, pay off your mortgage and cover their living expenses.
2. You Can Borrow Against It
With certain life insurance policies, you can build cash value that you can borrow against to do things like buying a house. This is only the case with whole (or permanent) life insurance, so if you’re looking to build cash value on your policy, you’ll need to spring for permanent life insurance. The only benefit of term life insurance is typically the death benefit that’s paid out once you or your spouse dies. And the beneficiaries of the policy are the only ones who benefit from that kind of policy. So if you think you’ll want to borrow against your life insurance policy to fund a major purchase, think whole life insurance.
3. It Keeps Your Family Protected
One of the benefits of term life insurance is that it can keep your children and the rest of your family protected in the event that something happens to you while they’re still growing up. It’ll allow you to breathe easier knowing that if something happens to you and they have to go live with another family member, that person will have the money they need to properly care for them. Determine how much your children would need if you were no longer around and factor in expenses like clothes, food, education and other expenses that are important to you.
4. It Protects Your Assets
A life insurance policy can help protect your assets after you’re gone by providing your loved ones with a way to keep up with the mortgage payments and keep the house from going into foreclosure if your family is unable to pay. It can also help protect your other assets if you have them, and give your beneficiaries an opportunity to build on yours and their legacy.
5. It Comes With Additional Benefits
With an insurance policy like USAA’s, you’ll get protection if you become disabled for a small, up-front, optional fee so that your premiums are waived in the event that you become disabled. And if you start off with a term life insurance policy, you can convert to a permanent life insurance policy any time you need to when your circumstances happen to change. For example, if you’re between the ages of 18 and 35, you’re eligible to get an additional $100,000 term life insurance policy when you get married, have a baby or buy a house.
Determining What Kind of Life Insurance You Need
Now that you know how life insurance can protect the people you love as well as your assets once you’re gone, you can begin thinking about what kind of life insurance is right for you based on your personal situation and your financial goals. Take the time to find a policy that works for you and helps secure your family’s financial future.