Life insurance can serve as a crucial part of a financial strategy. It may help provide financial support to loved ones after your death. For some people, life insurance also provides living benefits, such as cash value growth and the ability to borrow against the policy’s value.
Contact the Meyer Group in Saint Louis, Missouri, to learn more about your life insurance options.
What Are the Types of Life Insurance?
There are two main types of life insurance:
· Term life insurance provides a death benefit if the insured person dies during the policy’s term (typically 5, 10, 15 or 20 years). Beneficiaries can file a claim to receive the death benefit and use the money for any purpose.
· Permanent life insurance (e.g., whole life insurance) provides a death benefit that the insured person cannot outlive. In addition to the death benefit, there’s typically a cash value component designed to grow over time. Depending on the type of policy, the policyholder might be able to borrow against the policy’s value or cash out the policy for its cash value minus fees.
Uses for Life Insurance
Beneficiaries of a permanent or term life insurance policy can use the death benefit for any reason, including:
· Pay off jointly held debt
· Support children or other dependents
· Donate to a charity
· Replace the deceased person’s regular income
· Provide an inheritance to loved ones
· Pay state or federal estate taxes
Permanent life insurance policies may provide more flexibility to policy owners. This life insurance provides a death benefit when the insured person dies, which may be reduced by outstanding policy loans.
During the policy owner’s lifetime, they may be able to use their permanent life insurance policy for the following:
· Access to funds to pay healthcare costs
· Supplement to retirement income
· Collateral for a loan
Policy owners might be able to add an accelerated death benefit rider to a permanent life insurance policy. This rider provides access to a portion of the policy’s death benefit, which the policy owner can use for any reason.
Contact the Meyer Group to get started building a life insurance plan to help support your long-term financial goals and provide financial protection for your loved ones.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.