Many of us procrastinate doing the boring, everyday things in life like filing our taxes or cleaning out the garage. Though noticeable to all those around us, one task we often overlook is taking care of our families – you know, the spouse and kids. When you die, no one can replace what you’ve done for them just by working; whole life insurance – Monegenix gives the best life insurance offer.
Life insurance is meant for one thing, and that’s providing for your loved ones in the future. They can provide you with a lump sum to pay off debt or a monthly income for life so that your spouse or child is never without the financial resources to get their life back on track after your passing.
In this article, we share five uses for a life insurance policy that are practical and exciting!
- Pay off debt
If you have children, it’s likely that you’ve taken out debt for their education or their needs in general. Life insurance can help pay off debt if something happens to you.
Many people use their life insurance policy as a safety net when they die to ensure that their loved ones are taken care of, but others also use it to insure against financial loss. This is just as valuable when it comes to paying off debt.
Life insurance policies can also help you pay off debts if you have outstanding debt obligations, including student loans and credit cards; a life insurance payout can help you get out from under that debt once and for all. This way, you won’t have to continue paying interest on those balances in the future.
- Fund a college study
Life insurance proceeds can be used to help fund your children’s college education. A college fund is one of the life insurance benefits and should be considered early in life. The money you set aside for your child’s education early in their life will have a greater effect on your overall financial foundation than if you waited until they are ready to enroll in college. The earlier you start, the more time the money has to grow.
There are several options for starting a college fund. You can open a custodial account with a brokerage firm or open an account at a commercial bank that offers CDs. Some companies will provide you with a matching contribution, so be sure and ask about that when opening an account.
You can also purchase term life insurance policies and use the proceeds to help fund them. In addition, you can make maximum contributions to your company’s retirement plan and use the tax savings to contribute even more to your child’s education.
- Create a legacy
You can use life insurance proceeds to start a foundation, endow a scholarship, or any other charitable cause in your name. A legacy fund is a trust created to generate income for specific beneficiaries after the death of the settlor or “donor.”
Legacy funds are more commonly used by those who have accumulated sizable assets and wish to pass that wealth on to future generations. But they can also be used to pay for unexpected expenses, such as medical bills, while a person is alive.
You may want to create a legacy fund to:
- Leave an inheritance for your children when you die.
- Protect your assets from creditors and lawsuits.
- Support designated charities.
Either way, you would have achieved your goal of having life insurance.
- Replace lost income
Life insurance payments can provide income for your spouse or children if you die unexpectedly and need money to make ends meet until they can find another source of income.
- Retirement funding
You don’t have to wait until retirement age or even disability retirement age to use your life insurance policy as a source of funds for retirement needs. You can borrow against the cash value of your policy, pay back the loan with interest, and continue building tax-deferred cash value in your policy while you’re still working.
Life insurance can provide a great deal of financial stability to your family and loved ones, but you may be surprised to learn how it can give them peace of mind. There are many ways you can use your life insurance benefits to pay for legacy gifts and other types of expenses after your death, including these five uses that are, perhaps, less obvious. It’s important to discuss your options with a local independent agent to see how they can best serve your purposes.