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Old 01-06-2012, 03:41 PM
runawaykinms runawaykinms is offline
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Join Date: Dec 2011
Posts: 2
Default Re: Benefits of life insurance policy?

That is a good question, here are a few benefits:

1. Family/beneficiary receives a lump sum of money in the event of your death.

This alone is enough of a benefit to get coverage. Here are some examples of how this can help your family.
-Funerals are costing on average around $7500 today and some cost more like $10,000. Who is gonna be stuck with that bill when you die.
-Are you married. If so, do you want your spouse to be able to maintain their current lifestyle if you die. I want my spouse to be able to continue living a good life and not have to file for bankruptcy and be left to fend for themselves completely.
-Do you own a home? I suggest having enough coverage to pay off your mortgage in the event of your death. This way your spouse and/or kids can continue to live in the home after you die. This will be a small but important comfort for them.
-Do you have kids? If you have children along with the responsibilities you now have, you should consider the financial responsibilities involved. Life insurance is a way to help with that.

2. Tax Benefits

In most states your estate (Property, cash, stocks, etc) is taxed and creditors can go after it as well to obtain payments. However, life insurance payments are usually not taxed and protected from creditors. A lot of people use life insurance as a tax friendly way to transfer their wealth at death.

3. It is cheap (For most people)

Term life insurance is very affordable. You can often find policy for $200,000 for under $20 a month. Depending on your age and health conditions, the prices are unbeatable for the peace of mind you get in protecting your family.

These are just a few of the reasons I can think of that are benefits of life insurance. Hopefully this is helpful!
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