The main function of Life Insurance is to protect your family and loved ones in case of your death. If you were to die, any debts that you owe, as well as the costs associated with your funeral, could be passed to your family and loved ones. Life Insurance may not keep some of these debts from passing to them, but it would certainly lessen the amount owed.
Life Insurance can also be used as a savings and investment vehicle. Certain life insurance policies are tied to investment accounts and market indexes, which allows the policy to grow. These policies still have a face value, but they also will build a cash value. This cash value can be used as a loan from the policy, or they can simply be used to increase the amount of payout at the time of payment.
Founder, Abrams Insurance Solutions, Inc., San Diego, CA
Life Insurance is a financial vehicles with many different uses. Some of the more common uses (functions) of life insurance are:
Death Benefit to protect a loved one
College Funding vehicle
Buy-Sell Agreement for business owners
Executive Bonus plans to compensate key employees or business owners
Vehicle to create tax-free income in retirement
Income replacement
Charitable Giving
Mortgage Protection
Final Expense
These are some of the highlights, but life insurance offers a combination of features and benefits that are not available in any other financial vehicle.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
While the payoff of debts is one of the most common purposes people buy life insurance to fulfill, two other major areas of need that this line of insurance is used to help with is income replacement (to maintain the lifestyle your family members have become accustomed to) as well as estate planning.
Owner/ Financial Planner, Laura Knight Insurance Agency, PLLC, Montana
Life insurance has different kinds of functions depending upon what type of policy you have.
One of the most important functions in Life insurance is to protect your family and loved ones in the event of premature death.
Something that is just as important as premature death is Living Benefits that protect your family and loved ones in the event you need benefits while you are still alive! There are many needs for Life Insurance coverage but, that would be best determined by ones own needs and personal situations. Every families situation is not the same it needs to be personalized.
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Life Insurance can also be used as a savings and investment vehicle. Certain life insurance policies are tied to investment accounts and market indexes, which allows the policy to grow. These policies still have a face value, but they also will build a cash value. This cash value can be used as a loan from the policy, or they can simply be used to increase the amount of payout at the time of payment.
Death Benefit to protect a loved one
College Funding vehicle
Buy-Sell Agreement for business owners
Executive Bonus plans to compensate key employees or business owners
Vehicle to create tax-free income in retirement
Income replacement
Charitable Giving
Mortgage Protection
Final Expense
These are some of the highlights, but life insurance offers a combination of features and benefits that are not available in any other financial vehicle.
One of the most important functions in Life insurance is to protect your family and loved ones in the event of premature death.
Something that is just as important as premature death is Living Benefits that protect your family and loved ones in the event you need benefits while you are still alive! There are many needs for Life Insurance coverage but, that would be best determined by ones own needs and personal situations. Every families situation is not the same it needs to be personalized.