If you’ve discussed implementing a life insurance policy with your insurance agent, you know well that planning for the future is essential for your family. Life insurance can be a valuable tool when it comes to your overall estate planning, but it’s important to make the right choices to ensure your loved ones are protected after you’re gone. Here’s a closer look at how your policy can be an advantage for your plans.
How Life Insurance Works
By paying monthly premiums to your insurance company, you’re guaranteed a death benefit when you pass away. These funds are received by your family and can be used for many different purposes. These include burial costs, medical costs, college funding, income replacement, and any other financial obligations your family may be subject to after you’re gone. While it’s crucial to have a reliable policy in place, you also want to make sure you know your options.
Different Types of Life Insurance
With term life insurance, you’re only covered for a certain term, which usually ranges from 10 to 30 years. If you die within the term, you receive death benefits, but if you outlive the term, you’ll need to repurchase this or another policy. Conversely, a whole-life policy insures you as long as you make premium payments. It also has a cash value component, which makes it a great investment tool. That means your family will receive the death benefit along with the money your insurance policy has accrued.
Life insurance can even help you mitigate estate taxes in some instances. While it’s true many people won’t be subject to estate tax, if you own a great deal of property or are a business owner, it’s definitely something to consider. In this case, some people utilize their life insurance policy to settle any taxes so their family isn’t unduly burdened. There are also state and inheritance taxes, which vary depending on where you live.
Life insurance can be confusing, and it’s up to your insurance agent to explain your options in a clear and concise manner. That’s why residents of Mebane, NC, look to Farm Bureau of Mebane-Caudill Agency when shopping for insurance to supplement their estate plans. They offer a wide range of coverage options, including comprehensive life insurance policies to safeguard your family after you’re gone. Additional products include auto coverage, homeowners insurance, health insurance, and coverage for business owners. The team of Jonathan Caudill, Alan Wilson, Jay Lee, and Eric Michaels has been protecting Alamance and Orange counties for more than two decades. Call (919) 563-3276 today to schedule a consultation or visit the website to get a quote.