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Why Is Life Insurance So Important?
When the time comes to consider whether to buy life insurance, consider all the benefits a policy can offer to you even if you are older, have no kids, or have no goals to leave money behind to others. Even in these situations, individuals benefit from buying cost-effective life insurance policies for many reasons. Take a look at some of the key reasons why you may benefit from it during your lifetime and how your family benefits from it later.
Learn the Importance of Life Insurance at Your Age
As you take into consideration when you should buy life insurance, remember that there is no better age to do so than right now. The younger you are, the lower the cost for it will be. Yet, this is also a good thing because it means there will be more time for the value of your life insurance policy to grow. Some policies offer key benefits you can take advantage of during your lifetime – and those benefits are well worth investing in for most people. Keep in mind that even if you are older, there are key reasons to buy coverage both for yourself and for your family. Have you considered why you should do so?
Whole Life Insurance Offers Key Benefits for Retirement
One of the reasons to buy whole life insurance is because it can help you to fund your retirement goals. Let’s assume you do not want to buy a policy just to leave money behind to friends and family. That’s okay. This is one way a policy can benefit you now, during your lifetime. The coverage will build up value over your life when you make contributions to it. Whole life insurance, those policies with cash value, do this by building interest from the performance of the underlying investments. Later, when you are ready to retire, you can start taking dividends from the policy to help during your retirement years. There are key tax advantages here, as well. This is a good way to supplement other forms of retirement planning you are already using such as 401ks and IRAs.
Universal Life Insurance Can Help You with Building Up Your Investments
Universal life insurance is another tool to help you. It is a type of investment focused life insurance plan. It also has a cash value and can build up that value during your lifetime. If the plan performs well, you may get dividends from time to time. That is money that lands in your pocket – with tax advantages with it – to help you build up your portfolio. You can choose to continue to invest it or cash it out for other goals. There is some risk with these policies, and most do not offer a guarantee of wealth building, but they can be a good option for many people.
Whole Life Insurance Policies Offer a Way to Borrow During Your Lifetime
Did you know that those life insurance policies that allow you to build cash value also allow you to borrow from them? Some policies may not, but most permanent life insurance policies with a cash value will do this. For many reasons, this means you gain a key benefit – you get access to a low interest loan without any consideration for your credit score. There is no impact on your credit score for using these funds either. And, you are going to pay the money back to your policy, which means there is no implication to borrowing those funds aside from the interest cost.
Term Life Insurance Protects Your Family
Perhaps most importantly, buying a term life insurance policy is wise for anyone that has dependents. It helps them to maintain their quality of life and continue to pay their bills if you are not there to provide that financial support for them. For many families, a tragedy can be financially devastating, providing family members with no real way to maintain their bills. For all of these reasons, life insurance is a proven financial must have for many people. The right policy can help you accomplish many goals during your lifetime and beyond it.
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