If you have enrolled in a life insurance policy, or you’re considering one, you’re probably thinking of providing a lump sum benefit for your loved ones in the event of your passing. These funds would pay for final expenses, and of course provide for their financial security in your absence.
But you might be surprised to learn that those are not the only purposes of life insurance! These days, life insurance can be used creatively to provide for a number of other needs, including (but certainly not limited to) the following:
Cover your debts. Aside from simply replacing your lost income, consider a life insurance policy as protection for the debts you’ve incurred over your lifetime. If something happens to you, can your family still afford the mortgage and other bills? The death benefit can be designed to pay off these debts.
Equalize inheritances. What if you want to leave a certain asset to one child in particular? A payout to the other child from a life insurance policy, in the approximate amount of the asset, can equalize the inheritance and prevent hurt feelings.
Build your net worth. A life insurance policy that builds cash value can allow you to borrow against it, in the event that you need the funds for an emergency one day.
Make the world a better place. You can actually name a particular charitable organization as a beneficiary on a life insurance policy, allowing you to leave a positive impact on your community after you’re gone.
For more information on these possible uses of life insurance, or other topics related to financial and retirement planning, give us a call. We can help you compare life insurance policies and select one that meets your needs and objectives.
