Life insurance is an important part of planning your family’s financial future. If you are a breadwinner for your family, you have to consider the financial consequences of an event that would lead to your death. It is uncomfortable to think about life-threatening scenarios, but it is necessary to ensure fianncial security for your family. Here are some of the main life insurance advantages.
Provide Living Expenses for an Extended Period of Time
Death benefits on life insurance policies are often large lump-sum amounts ($500,000 or $1,000,000, for example). This type of payout helps your family maintain a high standard of living after losing your income. Insurance advisors generally recommend purchasing a policy for an amount equal to seven to ten times your annual income.
Get Living Benefits From the Policy
Some policies include additional riders for qualifying events such as chronic illness and terminal illness. This allows you to receive money from the policy while you are still alive if you suffer a qualifying event.
Accumulate Cash Value
Some policies allow for cash value accumulation through index funds or other means. You can withdraw the cash value to cover a wide range of expenses, or you can allow it to grow and supplement your retirement plan.
The most important benefit of life insurance is protecting your family, but policies can also provide value while you are still living if you explore additional features.