Choosing the right life insurance plan depends on your needs. A financial professional can help you calculate your needs, compare the costs and benefits of different policies, and identify potential options that best suit your needs.
Be sure to consider the insurer’s financial stability, customer satisfaction, available policy types and included riders. Contact Life Insurance Greenville now!
Peace of Mind
Peace of mind is a feeling of calm and serenity that comes from knowing you have taken the necessary steps to protect your family. It can be achieved through life insurance, which provides financial protection in the event of your death, easing the burden of funeral costs, outstanding debts, mortgage payments and other expenses on your loved ones during a difficult time.
The first step to finding peace of mind through life insurance is determining your objectives and choosing a coverage amount that will meet those goals. To do this, consider your family’s current finances, including any existing debts or upcoming bills you have, how much income you earn per year and the cost of college tuition for any children you may have.
In addition to offering a death benefit, whole life insurance policies often come with a cash value account that accumulates interest over time. The money in this account can be withdrawn or borrowed at any time and is not subject to federal taxes. You can also add a return of premium rider to your policy, which allows you to receive all the premiums you’ve paid into the policy in the event of your death.
Finding peace of mind through life insurance can be a long process and requires dedication. But by focusing on your family’s future, you can find comfort in the knowledge that you are prepared for anything that might come your way. If you’re looking for peace of mind, talk to a Symmetry agent today about your policy options. They can schedule in-home or video conference appointments and help you get a life insurance policy in place, all from the comfort of home.
- Financial Protection
The primary reason to purchase life insurance is to provide your loved ones with a financial safety net in the event of your death. A lump-sum death benefit from your policy can cover a mortgage, debts, children’s college funds, funeral expenses and other final costs. The death benefit may also help your family pay for daily living expenses and replace your lost income. In addition, the death benefit can bypass probate and be passed to your beneficiaries tax-free.
A portion of your premium goes toward building a cash value in your policy, which accumulates at a guaranteed rate of return. Typically, whole life and universal policies have this feature. You can borrow against the accumulated cash value, and most insurers allow you to change your beneficiary or add coverage in the future without going through another medical exam (provided that you can afford the increased premium).
When choosing a life insurance policy, consider your financial protection needs and budget. Financial experts recommend multiplying your annual income by 8 – 10. This calculation will help you arrive at an adequate amount of coverage to provide for your family’s ongoing living expenses and other obligations in the event of your passing.
It’s important to review your policy regularly to keep up with changing circumstances and responsibilities, as well as any new relationships and family members. You can change your beneficiaries at any time by submitting a formal request to the insurance company.
Many whole life insurance policies have a rider that allows the accelerated payment of the death benefit if the insured has a terminal illness, such as cancer or heart or kidney disease, within a specified time period. You can learn more about these riders by visiting your local J.P. Morgan advisor or requesting an illustration from your insurer.
- Inheritance Tax Relief
If your estate is liable for inheritance tax, the death benefit of a life insurance policy can help. This is because a life insurance payout is generally federal income-tax free, meaning it won’t count as part of your taxable estate.
That’s a big advantage, especially for unmarried couples, because the death of one partner can leave the other struggling to cover mortgage payments, bills, and other expenses. A life insurance policy can ensure your heirs will have the money they need to cover all of that and more.
Keep in mind, though, that any growth or interest accumulated on the insurance policy will be taxable for your beneficiaries. But you can avoid this by transferring ownership of the policy before your death. That way, the benefits of any growth will be paid to your heirs without adding to your taxable estate.
You can also use a life insurance policy to minimize taxes for your heirs by setting it up in an irrevocable trust. This will remove the policy from your taxable estate and allow it to grow without being subject to taxes until it’s paid out.
Inheritance taxes are not a concern for everyone, but those with significant assets should consider how to minimize their liability for their heirs. Through careful estate planning, a life insurance policy can create cash at the time of death that can be used to pay estate taxes or replace any other liquid assets that were used up to pay the tax. That can make the difference between your heirs getting the inheritance they need or having to sell some of their other valuable assets to pay the taxes.
- College Funding
Incorporating life insurance into your overall college funding strategy can be a worthwhile move. It provides you with a number of benefits not available through other savings vehicles, including 529 plans.
One of the biggest advantages of whole or universal life insurance policies is that they allow policyholders to access accumulated cash value for college tuition. This can be accomplished through the use of a loan or a withdrawal from the policy. It’s important to note, however, that this option is only available to those with permanent life insurance, not term life insurance.
A financial professional can help you determine whether a permanent life insurance policy is the right solution for your college-funding needs. In addition to the death benefit, the most common type of permanent life insurance has a savings component that grows tax-deferred and earns dividends in some cases. This accumulated money can be used for college tuition without incurring any penalties.
Moreover, unlike investments in a 529 plan, the cash built up in a permanent life insurance policy does not count toward the family’s assets when calculating financial aid eligibility for your child. The downside of a life insurance policy for college funding is that there are generally high yearly fees and it can take decades to build up the account beyond what you’ve paid in premiums.
Nonetheless, it’s an excellent alternative to the many other options on the market for saving for future college expenses. You’ll want to talk with your financial professional before making a decision, but this could be a good choice for some families. It’s especially attractive for those with high-net-worth individuals who don’t want to risk the value of their illiquid assets.
- Final Expenses
The death of a loved one is a traumatic event for families, but it can also be financially straining. The costs of a funeral, burial or cremation can quickly add up and leave loved ones with lingering bills and debts to pay. This is where final expenses life insurance can help.
Also known as funeral insurance or burial policies, final expense policies offer low coverage amounts up to $50,000 and require no medical exam (though you may be required to answer some health questions). They tend to have lower premiums than whole life or term life insurance, making them a good option for those who don’t qualify for other types of life insurance due to age or health.
A final expense policy’s death benefit can be used for any purpose the beneficiary chooses, including funeral and memorial services, transportation, urn service, headstone, obituary notices and flowers. Alternatively, beneficiaries can use the money to pay off credit card debt, mortgage payments or create a nest egg.
Unlike other types of life insurance, final expense policies are permanent and do not have an expiration date. However, a policyholder’s health will decline over time, which can lead to higher premiums and a reduced death benefit. Some insurers have a maximum age at which they will no longer issue a policy, while others will limit the largest death benefit to those who are younger. Many insurers will also have minimum ages at which they will start offering a policy. These limits can range from birth to 85, depending on the insurer and the policy type. Some policies are guaranteed issue, meaning applicants do not have to undergo a medical exam and may be eligible for up to $100,000 of death benefit even if they have serious health issues.
