When it comes to life insurance, the benefits are both emotional and financial. Life insurance can provide a financial safety net to your loved ones. It can help them manage their financial situation after your death and be able to continue paying their bills.
Top Benefits Provided by Life Insurance
Life insurance from companies like Colby Insurance can help pay for the various expenses that your family will need following your death. These include funeral services, transportation, and burial.
The average cost of a funeral is around $8,000. However, if you are planning on having a direct cremation, it can be as low as $1,000. On the other hand, a full-service funeral can cost many thousands of dollars.
Most people do not consider life insurance as a means of covering the final expenses. Instead, it is important to consider the long-term financial security it can provide for loved ones.
Even if you have lost many years of income, life insurance can help your surviving family maintain their living standards. It can cover the mortgage, car loan, and medical bills. Benefits paid by a life insurance policy are tax-free for your beneficiaries. They are allowed to use the money for whatever want.
Term Life Insurance Benefits
A term life insurance policy can provide you with a set amount of years of coverage. After the term expires, the policy can be renewed at a higher rate. The policy can have a lock-in rate of up to 40 years. It can also vary in length, such as 10, 20, or 30 years. You will pay regular premiums to maintain the policy’s force. Since your premiums will stay the same year after year, you can expect to receive a steady stream of income.
If you pass away while the insurance policy is in effect, your beneficiaries will receive the death benefit. However, they will not receive anything if the policy expires. Unlike a permanent life insurance policy, a term life insurance policy can protect against a shorter-term risk.
Unlike a permanent life insurance policy, a term life insurance policy can be more affordable. It can be easier to understand than a traditional life insurance policy. Even if you have health issues, a term life insurance policy can be affordable.
Whole Life Insurance Benefits
A whole life insurance policy is designed to provide you with long-term financial security even if you die. It can also grow cash value, which is guaranteed to do so even if the stock market and bonds perform poorly.
Your premium payments are used to build the cash value of your life insurance policy. Once it reaches a certain amount, you can use the cash value to pay your bills or take out a loan. If you surrender your whole life insurance policy, the cash value can be used to get some money back.
A whole life insurance policy that pays dividends may also be called a participating policy. This type of insurance is owned by a mutual insurance company, which is not controlled by its shareholders.
Although dividends are not guaranteed, many insurance companies have a long history of paying them. They can be used to pay your premiums, increase the cash value of your policy, or even provide you with a death benefit.
Although the insurance company will keep the cash value of your policy when you die, your beneficiaries only receive the death benefit. If you have any outstanding loans or withdrawals from the policy’s cash value, those are taken out of the death benefit.
Universal Life Insurance Benefits
Another type of life insurance is called universal life insurance, which provides a guaranteed death benefit. However, it can provide you with the flexibility to adjust the payment and benefits.
With universal life insurance, you can access the policy’s cash value through a loan or withdrawal during your lifetime. The growth rate can vary depending on the type of insurance that you buy.
A guaranteed universal life insurance policy that provides a guaranteed death benefit is the most affordable type of insurance. It doesn’t provide you with much cash value, but it can provide you with a steady payment.
A type of universal life insurance that is tied to the stock market is known as an indexed universal life insurance policy. This type of insurance can provide you with the flexibility to adjust the payment and benefits.
A variable universal life insurance policy can provide you with the flexibility to manage the investment performance of your policy. It can also provide you with the flexibility to change the payment and benefits. This type of insurance usually requires you to actively manage the policy.
Final Thoughts
The decision to buy life insurance can be a difficult one, especially with so many types of policies to choose from. Having insurance to help your loved ones after you pass can bring you peace knowing they will be taken care of when you’re gone.
