Life Insurance Benefits You Didn’t Know About

Most people know how to general parameters life insurance Works and whom it helps. In exchange for a monthly premium (often discount (if an annuity is paid) to a provider, the insured secures a financial safety net for their loved ones in the event of their death. Coverage amounts range significantly from a few thousand dollars to more $1 million.

The benefits of life insurance are usually obvious and the costs are often negligible for millions of Americans. You may already have a plan provided to you as a part Health benefits package provided by your employer.

But there are some benefits of life insurance that you might not know about. Buried in the fine print of an application, there are multiple ways to use a life insurance plan other than letting it sit idle for emergencies. These benefits can help you do both while you are alive and the event of your death.

If you don’t currently have life insurance, start by getting a free price quote so you know exactly what to expect.

Life Insurance Benefits You Didn’t Know About

Here are three life insurance benefits you may not know about.

You can get your premium back

Most policyholders are used to paying for insurance protection that they never need. But the money you use to pay your life insurance premiums doesn’t necessarily have to go to waste. By adding a “Return of Premium” rider Your policy can refund you the payments you made if you go beyond your pre-determined term.

this the rider – which comes with an additional cost – can be especially helpful for applicants who only need life insurance for a specific period of time (for example: until their child grows up or until college payments are complete). In this case, they can be sure that the payments will not be wasted.

You can now get a free price estimate for a term life insurance policy.

It can be used as cash

There are many different ones Types of Life Insurance Policies available. is the most well known Full and Expiration. The latter, however, comes with a desirable cash reserve that can actually be accessed by the insured while they are alive. That cash can then be used Pay off the debtHousehold repairs or anything else the policyholder wants.

Just understand that any amount withdrawn will be deducted from the final payment Beneficiary and loved ones. And, because of this cash option (and the policy lasts for the lifetime of the insured as opposed to a fixed term), whole life insurance costs more than a term policy.

You don’t have to pay tax on it

Many people are so used to paying taxes on what they buy and what they earn that they automatically assume that they must do the same for any life insurance premium. However, that is not always the case. for Term life insurance policyIn particular, you don’t have to report anything to the Internal Revenue Service (IRS).

“Generally, life insurance that you receive as a beneficiary on the death of the insured is not included in gross income and you do not have to report it,” explains the IRS. Online.

But because whole life insurance policies have a cash factor (and interest may accrue), a payout may be taxed first. “However, any interest you receive is taxable and should be reported as interest earned,” the IRS says

In short: Don’t worry about taxes if you have a term life insurance policy. Your beneficiaries will walk away with the amount you have already secured for them.

Get a term life insurance quote now and learn more.

Bottom line

Life insurance is a versatile form of financial protection. Accordingly, there are certain perks and benefits that you should be aware of in order to truly take advantage of your policy. So don’t automatically assume your payments are gone every month (you can get them back with a special rider). And you can use your policy as a backup cash reserve while you are alive. Finally, unless you have a whole life insurance policy that pays interest, your loved one will not have to pay taxes on the final payment amount.