2 Reasons You Should Have A Life Insurance Policy
When preparing your estate you might be wondering if you need life insurance. Say you have a pretty good savings account, and so if something were to happen to you, you think that your family could live off of the money that you have set aside. Although it is great to have a savings account, life insurance has a unique set of benefits. Here are some of the reasons why you should still have life insurance even if you have a hefty savings account.
1. Life Insurance Is Paid On Death
Assume that you plan on leaving all of your money to your children and family. When you organize your estate plan, you will put your assets in some sort of will or trust. Depending on the way that you organize it, when you pass away, the courts will have to distribute the assets and funds. This is a process called probate. In addition, if the estate plan is contested, it could take a long time for your family to have access to your money. This can be dangerous for your loved ones who need the money to pay for your funeral, medical expenses, living expenses and much more.
Life insurance is different. It is paid on death, which means that as soon as they receive the death certificate, they write out the check to the beneficiary on the account. This means that your family doesn't have any delay in getting their money. This is why many people choose to have life insurance, so their family can get their money faster.
2.You Save Money On Taxes
Life insurance isn't taxed the same way that your estate plan is. For example, if you have a will, the government will take a certain amount of money in the form of the death tax. This means that you have planned for your family to get all that money, but they will only get a fraction because of taxes.
Conversely you don't have to pay income tax on a life insurance policy. You may have to pay taxes on the interest you accrued on the insurance, but not on the actual policy itself. This means if you get a $500,000 policy, your family will get all $500,000. This is another reason why it is better to have a life insurance policy for your family.
For these reasons and many more, you should have a life insurance policy to protect your family financially in the case that you should pass away. Talk to an insurance agent, like those at Matt Roenker Insurance Agency, to learn about your various plan options and choose one that's right for your needs.
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