There are a number of significant benefits of having an effective life insurance policy in place. Individuals covered under a life insurance policy are afforded peace of mind, knowing that defined beneficiaries will receive a critical infusion of capital following their death, providing family members or others with support in addressing or preventing various adverse financial scenarios. The valuable coverage provided by a life insurance plan is enhanced by a number of advantageous tax treatments, such as income-tax-free policy loans, tax deferments on cash value growth over the course of the insured’s lifetime, and income-tax-free status on all death benefits. In some cases, death benefits may also be exempt from estate taxes.
Furthermore, many life insurance policies are highly flexible, allowing individuals and families to adjust plans as their needs change. Death benefits can be increased or decreased at any time, for instance, while premiums can be altered or skipped. Finally, cash value policies can be viewed as easily accessible, tax-favored funds should an urgent need arise during the insured’s lifetime. To learn more, reach out to a trusted life insurance professional in your area.