In most situations, life insurance is passed tax free to the beneficiary, which gives it a huge advantage over many other types of savings and investments.
It usually bypasses probate, making the funds more readily available.
The proceeds can be paid out in a lump sum or in installments with interest.
One does not have to wait until you have saved up enough money to get it. By paying regular premiums, it will pay your survivors far more than you could save up in the event of an untimely death.
It is secure and (unless one borrows from it excessively) it cannot be depleted until death.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Why is life insurance important in financial planning? Depending on the type you choose it provides a safety net to your portfolio and/or a completion aspect to your planning if you were to pass away. For the indivdual it falls on what's important to them. If they have others in their lives that they care about, insurance makes great sense.
Financial Planning is all about understanding what it will take to meet your financial goals now and into the future looking at all possible events that are controllable and unexpected. Life Insurance is a great tool to use which provides cash liquidity for lost income, paying estate taxes, providing tax-free income and more. How do you want your family taken care of when, not if you die, especially prematurely?
Life Insurance provides a benefit for pennies on the dollar for the benefit you will get in return. The expected events include weddings, vacations, new cars or other toys, etc. The unexpected are the market corrections that take away potential future income through retirement, health issues, kids and family support to just name a few.
I hope this provides a "nutshell" approach to why Life Insurance is important and should be considered in Financial Planning.
Most financial planning involves investments that are tax deferred. Life insurance is not subject to income tax at all. Therefore, people of high wealth are using life insurance for financial planning, while persons of low wealth are using life insurance because it is the most sure way to pass money to dependents in the event of an untimely death.
President, Lane Independent Agency, Southern California
Every financial planner I know urges their clients to have Whole Life Insurance. It allows you to build up cash equity, in addition to providing a death benefit later. It allows you to borrow against it, which continuing to grow. It allows you to help fund college education and retirement later on. It protects those you love, so they can maintain their standard of living. What could be a more important part of a financial plan. And it is tax free to boot! Call me for questions. Gary Lane, Registered Representative and Agent, New York Life, 949 797 2424. Thank you.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Why is life insurance important in financial planning? Because it is one of the first things in building a financial plan that should be considered. It is the foundation of planning. While everything else a person can do will be exciting in comparison, life insurance provides the boring grey cement that keeps stable if the ground shakes, winds blow and rain and snow come.
Life insurance is the boring part of a financial plan.. why? cause it does what it says it's going to do without drama.... it will be the most predictable financial product you will own.
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It usually bypasses probate, making the funds more readily available.
The proceeds can be paid out in a lump sum or in installments with interest.
One does not have to wait until you have saved up enough money to get it. By paying regular premiums, it will pay your survivors far more than you could save up in the event of an untimely death.
It is secure and (unless one borrows from it excessively) it cannot be depleted until death.
Life Insurance provides a benefit for pennies on the dollar for the benefit you will get in return. The expected events include weddings, vacations, new cars or other toys, etc. The unexpected are the market corrections that take away potential future income through retirement, health issues, kids and family support to just name a few.
I hope this provides a "nutshell" approach to why Life Insurance is important and should be considered in Financial Planning.
Life insurance is the boring part of a financial plan.. why? cause it does what it says it's going to do without drama.... it will be the most predictable financial product you will own.