Life insurance is important for several reasons:
Life insurance provides financial protection for your loved ones. When you die unexpectedly, life insurance provides financial support for your loved ones. It helps cover expenses such as funeral costs, outstanding debts, and living expenses.
Debt Relief
Pays off debts and expenses: Properly designed life insurance programs pay off outstanding debts, such as a mortgage or car loan, preventing your family from being burdened with those debts. Your family will inherit assets, not debts.
Standard of Living Maintained
Protects your family’s future: Life insurance helps ensure that your family is able to maintain their standard of living and pursue their goals and dreams, even if you are no longer able to provide for them.
Educational Opportunities
Your children and spouse can take advantage of opportunities to attend a trade school or college. Cash values in life insurance do not affect financial aid amounts in today’s aid formulas.
Cash for other opportunities
Provide cash value and investment opportunities: Some types of life insurance, such as whole life insurance, can provide a cash value component. Your cash value can be used as an investment or for other purposes.
Many retirees who held on to their whole life policies take loans against their accumulated cash values to supplement their retirement incomes. (Note: I strongly urge my clients to take loans from their policies, and not cash them in. This way, they are able to keep the policy in force simply by paying the annual interest on the policy loan. And, if they want, the opportunity remains to repay any loan amounts to rebuild the policy cash value. Cashing in a policy can create a taxable situation, and you’ll lose the benefit of a policy purchased at a younger age.)
A self-completing policy
Your policy can be self-completing during a short or long-term disability. The Waiver of Premium endorsement pays your premium until you are either able to resume normal work or reach the age of 65, after a period of disability. You must add this endorsement when first applying for your policy.
Overall, life insurance provides important financial protection and peace of mind for you and your loved ones. Nobody wants to think about the worst-case scenario. But, owning life insurance helps ensure your loved ones are taken care of when the unexpected happens.
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 27 of those years as the owner of Bridge Insurance Agency and Greaves Financial Services.
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Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. Or, go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
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