Life Insurance

The Benefits of Permanant Life Insurance

Aside from the death benefit, which goes directly to your designated beneficiary tax free in most cases one of the great things about permanent life insurance is that it builds cash value. Your policy becomes an asset you own, that you can control and access.

As you build cash value in your policy, you can easily take a policy loan against those funds to use for an emergency like a house repair you didn’t expect or as a source for funds to pay for an opportunity like college. You can also take a policy loan to pay premiums on the policy, and if you elect an automatic premium loan option when you purchase the policy, the company will automatically pay any premium that you do not pay in cash with a loan against the policy.

Taking a loan from a bank can be a lot of work, especially today. You typically have to send

W-2s, tax returns and other financial documents to find out whether you’ll even qualify to get money. On the contrary, provided you have the cash value available, policy loans are easy, simply by using a short company form to get the cash you need quickly.

Repaying a policy loan is easier, too. Unlike most traditional loans, a policy loan does not have a fixed repayment schedule. If you want to make a large payment one month, you can. If you want to pay nothing one month, you can.

The ease of taking and repaying policy loans does not mean that policy loans do not have to be paid back. They do. They can be repaid in cash, or they will be repaid from policy values. That means any outstanding loan balance will be repaid from your death or surrender benefits. If you pay off the loan, the full benefits of the policy will be restored.

Policy and premium loans are important benefits of permanent life insurance. As long as these loans are understood and managed properly, they can be an easy and fast source of cash without the risk of unexpected and unwanted tax liability.

Life Insurance for You and Your Spouse

The Importance of Life Insurance

An essential part of financial planning is creating provisions for your family and loved ones following your death. Life insurance can ensure financial security to those who mean the most to you, such as your spouse, children, and dependent parents. A carefully executed life insurance policy can help prepare for life’s uncertainties and give peace of mind knowing that the future of those who rely on you is secure.

Life insurance pays for immediate expenses.

Bills can start accumulating fast in the event of a death. Life insurance can be used to pay for immediate expenses, such as funeral services, unsettled hospital, and medical bills, mortgage payments, business commitments, and meeting college expenses for children. Your Whole Life policy provides tax-free funds directly to the named beneficiary of your choice, avoiding probate court, and gives access to cash to pay for grocery bills and other daily expenses. It also helps secure your estate by providing tax-free cash directly to pay estate and other obligations.

Your family’s standard of living can be maintained.

With the right coverage, your family’s lifestyle and standard of living can be sustained without relying on government assistance programs, and they can keep the family home they grew up in, adding much-needed normalcy during a difficult time.

You have a wide range of options.

There are two basic types of life insurance: term life and whole life. Term life policies offer death benefits, so if you die, you will get money back, but if you live past the pre-determined length of the policy, you get no benefits. Whole life or permanent insurance is more expensive, but these policies are open-ended and also accumulate a cash value that the policyholder can earn dividends and borrow against—or cash-in upon surrendering the policy.

Customize your policy and coverage.

 If you have dependent children, a spouse, and parents to care for, you’d want a policy that would protect them after death. Typically, policies are opened for the breadwinner of the family, but a stay-at-home spouse’s contributions are often overlooked. You might consider a policy to cover childcare, carpooling, and household chores expenses in the event of a stay-at-home spouse’s death. On the flip side, as you get older and children or parents are no longer dependent on you for income, you can reduce your coverage or drop it entirely.

Adequate coverage makes a difference.

An old-school rule of thumb is that your life insurance policy equals five to ten times your annual income. We will look at the number of dependents you have, how long they will be dependent upon you, and the lifestyle they expect to live after your death. It’s not a simple equation, but in general, you will need more coverage than a typical plan offered by an employer, which usually totals one or two years of your gross salary.

You can improve your credit rating.

A life insurance policy is considered a financial asset and may increase your credit score, which could be beneficial when trying to obtain medical insurance or a home or business loan.

Life insurance is not a simple product.

It’s wise to talk to an expert who can walk you through the pros and cons of available plans and help choose the coverage that works best for your individual situation, now and in the future. We offer insurance services and free consultations.

If this is something we can assist you with please contact us today for a quote at our Elm Grove branch at 262-641-0644 or our Jackson branch at 262-677-4101. We look forward to working with you on all of your insurance needs.

Remember…

There are only 2 reasons people buy life insurance…..they either love somebody, or they owe somebody