Benefit 4. Replacing Essential Income
As you moves through life, you will likely accumulate a range of expenses — from large debts like mortgages and loans, to smaller emergency payments, like medical bills. If you are struggling to pay for these expenses, you may be able to use withdrawals from your life insurance cash value as a source of additional income. Some financial planners recommend using life insurance to cover estate taxes so their other investments can continue to thrive, unimpeded by taxes, well beyond the death of the insured.
Even if you are still working, your life insurance policy can offer a source of much-needed additional wealth in unexpected situations. For instance, as people today are living and working longer than previous generations, it's important to think about how people will take care of themselves if they suffer from a long-term illness. On the other hand, people may find that they suddenly need additional cash for child care, or the long-term care of a relative.
In our next blog post, we will discuss the fifth benefit of life insurance people haven't thought of.