If you have dependants that rely on you for income, life insurance represents one way to make sure they have financial security in the event you pass away. While a life insurance policy will grant a payout to your beneficiaries if you die, it can also provide several additional benefits.
So today, the team at Medical Profiles will discuss the financial strength and many benefits of life insurance in Houston, TX.
Benefits of Life Insurance
Everyone knows that life insurance provides a death benefit payment to secure your loved ones’ financial future. However, the other benefits of life insurance policies seem a bit more understated. Below we list just a few of the benefits of life insurance.
Payouts Are Tax Free
Payouts from term and permanent policies are 100% tax free. That means if you die while your policy is active, your beneficiaries will receive 100% of the death benefit and can spend it however they please. Death benefits do not count as income, and beneficiaries won’t have to report the payout on their annual tax returns.
Pay for Education Costs
Education costs in the U.S. continue to rise year after year. A life insurance policy can be an excellent way to ensure your dependent child can pay for education expenses in the event you pass away.
Most experts recommend that you purchase at least ten times your annual salary in life insurance coverage, as well as an additional $100,000 for each of your children that want to go to college.
Cover Funeral Expenses
The average cost of a funeral in the U.S. ranges from $6,900 to $7,800. Most Americans do not have enough saved to cover all funeral costs, meaning that paying for a funeral can represent a significant financial burden. Beneficiaries can use a portion of the life insurance death benefit to cover funeral expenses and avoid tapping into savings or investments.
Some insurance companies offer final expense coverage. Final expense coverage is separate from life insurance and covers end-of-life expenses related to funeral costs and outstanding medical bills.
Pay for Medical Expenses
Many insurance policies have policy endorsements called riders that provide additional benefits. An accelerated benefits rider lets policyholders prematurely access death benefits before dying to cover medical expenses.
For example, if you receive a terminal cancer diagnosis, the accelerated benefits rider would allow you to access the death benefit while still alive to pay for medical and palliative care.
Supplement Retirement Savings
One of the major benefits of life insurance in Houston, TX, includes a life insurance policy that can supplement your retirement savings. Permanent or whole life insurance policies have a cash value component that accrues value over time.
You can take out tax-free loans against the value of the policy or directly access the cash value by lowering the death benefit. Many people use the cash value portion of whole life insurance policies to supplement income during retirement.
Life insurance policies can supplement your retirement but should not be a replacement for traditional retirement savings, like an IRA or 401(k). Whole life insurance also costs significantly more than other types of life insurance, like term life insurance.
Life insurance remains something that anyone can benefit from, not just the wealthy. We highly recommend purchasing a life insurance policy if you have dependents that rely on you for financial protection.
Schedule Testing Today!
Now that you know the many benefits of life insurance in Houston, TX, it’s time to take the next step. Medical Profiles offers lab testing services in Houston, TX, for life insurance and personal wellness.
Contact us online or call today at (832) 251-3926 to schedule an appointment.
