Life insurance may not be something you think about on a daily basis but having a policy in place can positively affect you and your loved ones every day. Most people know that life insurance pays the beneficiary upon the death of the policyholder to provide immediate assistance to the family by covering any debts, taxes, or funeral expenses. In addition, it also offers longer term financial protection by replacing the deceased’s income. In the meantime, the policyholder and his or her family benefit from the peace of mind that comes from the financial security that life insurance will provide in the future. Depending on what type of life insurance policy you select, you may personally reap additional benefits. Two Primary Options The two main types of life insurance policies are term life and whole life insurance. Term life insurance has a time limit, usually in 10-year increments, up to 30 years and only pays upon the policyholder’s death. The premiums often are more affordable than a whole life policy’s monthly cost. Although whole life has a higher premium rate than term life insurance, it offers the added option of tax-free loans and withdrawals that you can tap into while you’re still living. These policies do not have a cutoff date provided that there are sufficient funds in your account, and you continue to pay your monthly premiums. Whole Life Insurance Benefits If you choose a whole life insurance policy, you can use the funds you accumulate in your account in a variety of ways. A few examples include paying medical bills or hospice care for an ill or aging family member, covering unexpected expenses, or investing in your own business venture. Because the money you invest in this kind of account is tax-deferred, you can amass value more quickly than you likely will with other investments, such as stocks and bonds. You can also use a whole life policy as collateral when you are seeking to take out a mortgage or a business or personal loan. If you are considering buying a life insurance policy, be sure to review your options with your family members and your financial advisor to determine which type makes the most sense for your individual circumstances. Amuni Financial, Inc. is a Broker-Dealer and Registered Investment Advisor. Member FINRA/SIPC. Please see our website for the states in which we’re registered to do business.
