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Top 3 Benefits of Life Insurance

The primary purpose of having life insurance is to take care of your loved ones with financial protection if you die. The main benefit is a tax-free payout. However, the advantages of life insurance go way beyond extra cash.


Life Insurance Meaning

Life insurance is no more than an agreement between you and an insurance carrier that the carrier will pay a sum of money to your beneficiary or loved ones when you die in exchange for your monthly premium payments.

Okay, life insurance is not an exciting topic to talk about. Please focus on this: You don’t buy life insurance because you’re going to die but because your family those you love are going to live—and you want them to be financially secure after you’re gone.

Important Takeaways

  • Death benefit proceeds can be used for paying off debts, funeral cost and college for your kids
  • Death benefit proceeds can be used for paying off debts, funeral cost and college for your kids
  • Life insurance riders can add to the benefits of your policy

What are the benefits of having life insurance

How does life insurance work? Some people think that having life insurance is an added cost, but the truth is that it can give your family financial security in case of death.

The best life insurance policy will not only cover funeral expenses but can also offer financial aid to your family. The bereaved family will get to pay the unpaid debt, education plan, and replace lost monthly income for at least five years.

First Advantage

The cost of a funeral service is increasing every year, and it is good to know that coverage can save your family from future funeral expenses. Today, the average cost of a funeral service ranges from $8,000 and more depending on the type of interment service. In case the decease is the breadwinner of the family, it is a considerable loss in the family’s monthly income.

Knowing the importance of life insurance ownership, a grieving family with life insurance coverage in place will have peace of mind knowing the policy can cover all their expenses.

Second Advantage

Having life insurance coverage can benefit those families with mortgages in case the breadwinner dies. No one wants to lose their valuable home and leave their family with nothing. It would be more challenging for the bereaved family to recover from losing a family member and lost home.

An acceptable policy can take care of the remaining mortgage so that you can leave your family in peace. Once the family informs the insurer about the insured’s death, the policy will automatically cover all insured debts.

Third Advantage

There is term life insurance coverage that does not only offer money once you left the world, but it can provide living benefits to the insured. This type of life insurance policy is known as life insurance with living benefits that can cover needs in case of a severe illness before you pass.

If you are diagnosed with a terminal illness and given 12 to 24 months to live, you can get some of the death benefits before you die. A well-structured coverage can even assist with the education plan if you have children still in school. It is hard for a family to recover from a breadwinner’s death if children are still studying in college.

How much does life insurance cost?

How much does life insurance costLife insurance costs depend on several factors, including your age and health, the type of policy you choose, and the amount of coverage you need. Generally speaking, term-life policies are more affordable than whole-life policies. Policies can range from a few to several hundred dollars per month, depending on your circumstances.

How Does The Importance of Life Insurance Work To Your Advantage?

Life insurance offers a vast amount of coverage for their insured member through compound interest. As you pay for the monthly premium, the company uses this money to invest in different businesses that earn interest over time.

It is good to say that the longer your policy is, the more money you can get and the lesser monthly premiums. Once the insured died, the insurer will return the interest incurred by the policy and keep some for them. 

The monthly premium that one needs to pay depends on several considerations. The accumulated interest rates and time are two essential things to determine how much money your family can get in case of your death. A compound interest rate takes time to grow, about 20 to 30 years, so the sooner you get life insurance, the more interest it can incur. 

What are the benefits of term life insurance

Term life insurance is the cheapest type of life insurance

You can lock in low rates if you buy term life when your young

You can lock in low rates if you buy term life when your young

If you can't afford the policy any longer, you won't lose any more money other than the premiums.

Term life doesn't have a cash value feature. You can get better returns by investing on your own

What are the benefits of whole life insurance

Combines an investment option with life insurance

The cash value can be used in estate planning

Can be used as a forced savings

Loans can be taken out against the cash value, even though this might decrease the death benefit

Benefits Of Life Insurance Riders

Disability income rider- Provides a monthly payment if you can't work. Serves as an alternative to long-term disability, although it's not as favorable and won't last as long as LTD coverage.

Disability waiver-of-premium rider- If you happen to become disabled, it will waive your premiums until the disability ends.

Term conversion rider- This will allow you to convert your term policy to a permanent policy.

Accelerated death benefit rider- If you are diagnosed by a doctor with a terminal illness and given less than 12-24 months to live you can get part of your death benefit paid out before you die. Although this can help support your end of life needs, it will leave the beneficiary with a lower death payout.

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Financial benefits of life insurance

financial benefits of life insuranceIt will help if you get accurate quotes to fit your particular situation and find a policy that will fit your needs and budget. Here is a direct to consumer quoting tool that will let you get quotes and apply for the policy simultaneously.  Quote and Apply.

Frequently Asked Questions

What are benefits of life insurance?

Life insurance provides financial security for your loved ones during your unexpected death. It can help cover funeral expenses, pay off debts and mortgages, and provide ongoing income for your family. Additionally, some life insurance policies offer investment opportunities and tax benefits.

What are the 3 advantages of whole life insurance?

The three main advantages of whole life insurance are: 1) it provides lifelong coverage, 2) it has a cash value component that grows over time, and 3) it offers tax-deferred growth on the cash value component.

What does life insurance protect you from?

Life insurance protects your loved ones financially after your unexpected death. It can help cover expenses such as funeral costs and outstanding debts and provide ongoing financial support for your family. It can also provide peace of mind knowing that your loved ones will be taken care of financially if something happens to you.

Meet the team

About Coach B.

After starting his financial career with Phoenix Home Life Insurance Company back in 1992, Scott decided he wanted to provide people with an easier and more enjoyable way to buy life insurance. That was the start of Coach B. Life Insurance, whose mission is to be transparent, honest, and helpful to customers — without ever bugging or pushing them.

In the years since then, he has worked tirelessly to improve the process of shopping for insurance. His goal is to make sure that everyone who comes to Coach B. — whether they end up buying a policy or not — has the best possible experience.

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