Do you have a plan for when you die?
Most people don’t want to think about their untimely death, but if you have a family, it’s a necessity. You don’t want to leave them with the financial burden of burial on top of the grief they will be feeling.
In 2017, 85% of Americans agreed that life insurance is used to cover a person’s final wishes. However, 67% of Americans also said it’s to compensate for lost wages. Another 54% said they use it to pay the mortgage.
As these statistics show, the benefits of life insurance are well beyond what most people think. As you learn more about life insurance policies, you’ll see that they can insure your life in more ways than one.
If you’re still on the fence about signing yourself up, check out these 7 ways the benefits of life insurance can relieve you of some stress.
1. Covers Your Burial Costs
When people think of life insurance, they should think of their burial needs. While nearly everyone has been to a funeral at least once in their life, few people truly know how many expensive elements go into one.
A body needs to be transported to the funeral home, a service which usually costs over $300. The embalming and beautification of the deceased is even more expensive, running around $900-$1,000.
Should you choose to have a viewing and ceremony in a funeral home, you will need to pay about $500 for each event. Additionally, a funeral director’s services will cost about $2,000.
Of course, some people choose to host their own ceremony to save money but know that this is a lot of work for someone who is already grieving. Clearly, these costs can be quite a burden to your family if you leave them unprepared.
That’s why this is one of the main benefits of life insurance.
2. Protects Your Household Income
If you’re bringing in the only paycheck in your household, it’s absolutely essential that you have a life insurance policy. How else will your family support themselves if something unfortunate occurs?
Of course, the unfortunate event doesn’t have to be your death. It could be any situation where your household loses your income. A life insurance policy doesn’t just concern your death but protects your way of life as well.
Even if you aren’t the only breadwinner, a life insurance policy can also help supplement a two-person income should you lose one of those paychecks.
This is yet another reason to go out and find a business that offers the best life insurance policy.
3. Protects Your Business
Your family isn’t the only thing you need to worry about – if you own a business you’ll need a life insurance policy for that as well.
If you are a partner, or you have business partners, a life insurance policy is crucial to ensuring the survival of the business in the case that any partner passes away. The policy can also handles what happens to the shares.
Eventually, another partner will be found, but life insurance can help out a lot in the complicated interim.
4. You Can Withdraw Anytime
No matter what you need your policy for, there are several benefits of life insurance over other forms of investment.
For example, there are no early withdrawal penalties, unlike with an IRA or 401(k). It’s your money and you can use it when you need it.
You can’t foresee misfortune, so it’s essential to have a safety net you can access at any time.
5. Helps Pay for College
Raising a child is not cheap. While your life insurance will provide your family with a supplement should they lose your income, perhaps you want to think even farther ahead.
The cost of college is more expensive than ever before, and if you’re not around, it will be even harder to afford. That’s a great reason to set up a life insurance policy to save your children from tens of thousands of dollars of student loan debt.
Parents can even choose to take out loans against their life insurance policy to help pay for their child’s future. The unstructured nature of life insurance loan payments makes it much more convenient for parents, rather than the burdensome nature of student loan debts. Parents can create their own repayment schedule.
Once the loan is paid back, another loan can be taken out at any time to accommodate another child. Actually, a loan can be taken out for any financial goal the policyholder wants or needs to meet. This is one of the many benefits of life insurance.
6. Assists With Retirement
Retirement is expensive, and it’s a source of stress for most Americans. You’ll need around 12 times your annual salary to sustain you in retirement. This is even more important to consider if you may be leaving a surviving spouse behind.
As a retirement investment, a life insurance policy can be more cost-effective. There are fewer fees associated with having someone manage your investment and dealing with government reporting.
And, unlike an IRA, you can contribute as much as you want, whenever you want. Additionally, if you need to leave this benefit to anyone, it will be completely tax-free. Again, this is not true for an IRA or a 401(k).
As you learn more about life insurance policies, you’ll see that they can insure your life in more ways than one.
7. Relieves Your Debts
If you have any debt at all attached to your name, that will come out of your estate in the end. Make sure that your life insurance policy accounts for that when you arrange the details.
There’s nothing worse than your family relying on your life insurance benefits to pay the mortgage, only to find out that your debt has emptied the account.
The situation is even worse if you’ve cosigned any loans, like a mortgage with your spouse. Now your spouse will be solely responsible for the remaining debt.
In fact, in 9 states, your spouse is even responsible for debts only in your name. The grief of losing a loved one is enough to deal with without adding all this financial stress.
The Many Benefits of Life Insurance
These reasons alone should be more than enough for everyone to make sure they’re covered.
To explore your life insurance options, check out our page to find the best life insurance companies today.