Today is National Life Insurance Day! You might be thinking: How does one celebrate National Life Insurance Day? Consider this: Life insurance is not just an insurance product, but a financial tool that can help protect your loved ones and secure their futures. Life insurance is here for you for as long as you need it (depending on the product) and has a few benefits you might not expect.
Most life insurance death benefits are paid out tax free.
Did you know that beneficiaries may not owe any taxes on life insurance death benefits? When planning how to leave a legacy for your nearest and dearest, one of the things you may want to consider is purchasing a permanent life insurance policy and naming your loved ones as the beneficiaries. No matter when you pass away, that money will pass to the policy’s beneficiaries and when they need those funds, depending on how the money is paid out, they don’t have to worry about incurring a large tax bill and reducing the death benefit.
You may be able to receive benefits from a life insurance policy even while you are alive.
Permanent life insurance policies contain cash value, a savings-type element that is built into policies and may be accessible via policy loans while the insured is alive. Once the policy has enough cash value built up (which may take a few years), the policy owner can pull money from the policy and use it however they see fit – for example, paying for bills associated with college, a new car, a family vacation, or an emergency.
(Note that there may be policy and/or tax implications if policy loans are not repaid. Consulting a tax adviser or insurance representative can help you get a good idea of the fine print.)
Life insurance is more affordable than you may think.
Paying for vehicle or homeowner’s insurance can put a significant dent in your wallet. Fortunately, the same doesn’t have to be said for life insurance. Many people overestimate the cost of protecting their family, but the price of life insurance is based on a few things: the product (term insurance is cheaper than permanent insurance), the age of the insured (the younger the insured, the cheaper the premiums), and the health of the insured (the healthier the insured, the cheaper the premiums). An insurance representative can help you fit a policy to your needs and your budget, but rest assured that coverage doesn’t have to break the bank – and those you love will still be covered in an emergency.
Life Insurance doesn’t have to be one-and-done.
There are many strategies you could employ when protecting your family with life insurance. You could choose to purchase a single permanent policy that provides coverage through to your death, or a single term policy that provides coverage for a certain amount of time (e.g., if you want to protect your family from the financial impact or a mortgage or the length of time it takes your children to get through college). Many people choose to purchase a combination of policies – ensuring that there is more coverage while their family’s financial needs are highest.
If you aren’t ready to commit to a permanent policy, purchasing a term policy can provide you time to think about your options while still providing a level of protection until you’re ready to make a larger decision. While you don’t have to decide right now and there is space for you to change your mind, it does do well to remember that as the insured gets older, life insurance premiums do get pricier.
You don’t have to figure it out by yourself.
An internet search can be helpful, but Navy Mutual is here to help you sleep more soundly at night, knowing your family is financially protected. Their sales representatives are experts in the insurance industry and are able to perform a financial needs analysis based on your family’s finances and your circumstances – helping you find the right product or combination of products to fit the needs of your family. Discussing your options can make the decision-making process less stressful. Navy Mutual has your back.
Navy Mutual
This article is sponsored by Navy Mutual. Protect your family and your future. Navy Mutual provides affordable life insurance and annuities to those who have answered our nation’s call. If you are active duty, in the reserve or guard, or retired from any branch of the United States military or uniformed services, we’d be honored to serve you. Click here for a quote from Navy Mutual today!
About the Author
Aj Smit is the author of the book Red Thread: Weaving an Embodied Life of Joy, speaker, glitter enthusiast, and professional weaver of Joy. She is a military spouse in S. Korea with a pup and houseplants galore. Aj has led various Red Tents, retreats, and workshops internationally over the last ten years to help others discover how to weave creativity and curiosity into their lives. You can find her on Facebook and Instagram at @TheJoyWeaver and TheJoyWeaver.com.