Some people with life insurance can tell someone exactly why they bought it. Others may struggle a bit explaining the role life insurance plays in their overall financial situation. Let’s explore a couple of ways life insurance can help: - Financial Considerations - Most of the time, the benefit amount that goes to your beneficiary is not considered taxable income. Some exceptions exist, so check with your tax, legal or accounting professional.
- Estate Strategy - Life insurance can be helpful for passing wealth to the next generation.
Several factors affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder may also pay surrender charges and face income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments. Life is surprising. If you think you know how life insurance might help, perhaps it’s time to look again. |
