People give birth and death a lot of attention. But when you think about it, the stuff in the middle is what life is all about—education, work, marriage, children, home ownership, retirement. And life insurance can help with it all. Let’s find out why life insurance is so important and what types of policies can help you at each stage of your life.
The early stages of life bring events that start you on your path.
Marriage is often the first time people start thinking about life insurance. Of course you want to protect your spouse. You want to make sure that your spouse has the cash available to help pay funeral expenses, keep up with bills, and eliminate debt. A basic term policy is a popular option for newly married couples.
Buying a home is the single largest investment you may make. If you die with an outstanding mortgage, will your spouse be able to cover that monthly responsibility? Money from a life insurance policy can literally be what helps your family stay in their home. People sometimes consider buying a longer term policy for this need.
There’s nothing like holding your new baby to put your life’s priorities into perspective and start you thinking about life insurance. From diapers to diplomas, you’re likely paying for it all. So what will happen to your kids if you die and your income’s gone? Will your family be able to remain in their home? Will college still be an option? A term policycan help replace your income for your growing family and may keep their dreams alive.
Navigating Life’s Challenges … and Opportunities
The middle stages of life are about building and growing what you’ve got.
You’re likely to spend the bulk of your adult years building your career. During that time your income may increase and you’ll take on new expenses—a growing family, a bigger home, college tuition. Life insurance can provide money to help protect all that you’ve achieved in life. It may be the time to start thinking about a permanent policy which can be designed to last a lifetime. Or you can add a term policy to any existing coverage, while your expenses are highest.
Getting divorced, losing a spouse, remarrying, and starting a new family are all reasons to reevaluate your finances. Your life insurance coverage and beneficiaries should be reviewed, too. Consider if your coverage amount needs to be updated to accommodate a new budget. You may want to think about a policy that has potential to provide a source of income in retirement like universal life insurance, variable life insurance, or index universal life insurance.
If you are a business owner, then you know that growing a business takes years of hard work and dedication. Protecting your business with life insurance can help it stay strong well into the future. Life insurance can help entice key employees to stay while attracting new talent. It can also help when it’s time to pass the business on to your heirs. Business owners commonly get the types of policies that allow for access to cash value like universal life insurance, variable life insurance, or index universal life insurance.
Heading into Retirement … and Beyond
Moving into the later stages of life means time to make your golden years all that you hope for.
Who among us isn’t looking forward to retirement? Maybe you want to travel, buy a new home, or simply relax in your own back yard. You can do whatever you want, as long as you plan for it.
Life insurance can provide a death benefit to your spouse, children, and/or favorite charity when you die. Did you also know that some policies can provide tax-free income through policy loans and withdrawals1 in your retirement years? Or, you can access cash benefits through an optional policy rider to use any way you wish if you become ill. Universal life insurance and variable universal life insurance are the types of policies that come with those options.
Leaving a Legacy
You’ve spent a lifetime accumulating wealth and you want to pass it on to your loved ones. But also consider the fact that passing on assets to family also means you’re passing on a potential tax bill. The funds received from life insurance can help them pay the tax bill. It may even enable you to leave them more than you originally anticipated. Consider survivorship policies to help with these challenges.
1 Loans are charged interest; they are usually not taxable. Withdrawals are generally taxable to the extent they exceed basis in the policy. Loans that remain unpaid when the policy lapses or is surrendered while the insured is alive will be taxed immediately to the extent of gain in the policy. Unpaid loans and withdrawals reduce cash values and death benefits which may lapse the policy and may have tax consequences.
Source: Prudential Financial, Inc