Life insurance insures against dying too soon. It also protects against living too long.
The life insurance policy can provide a lifetime annuity as a settlement option. It can also allow for tax free withdrawals that are not subject to taxation.
Additionally, you can receive the long-term income without a loss of Social Security benefits.
Life Insurance Policy proceeds are usually not subject to income taxation, although they can be so incumbered. Life insurance will pay an "income tax free" death benefit to a beneficiary or beneficaries of your choice. However you can't just name anyone as a beneficiary, there must be an "insurable interest".
Common exclusions of a life insurance policy may include:
- Suicide in the first 2 years
- Death during the commission of a felony
- Death as a result of war, declared or undeclared
Most life insurance policies have a terminal illness benefit, where you can access the death benefit while you are alive in the event of a terminal illness, which is typically anywhere from 1 year or 6 months or less to live.
Some policies also contain "living benefits" that allow you to access the death benefit while you are alive in the event of a chronic (long-term care) or critical (heart attack, stroke, organ failure, ALS, etc.).
Some other common life insurance policy riders are "waiver of premium" which will waive your premium in the event of a disability (after 90 days). Disability income that pays you an income after 90 days for a period of anywhere from 2-5 years. Return of Premium, only availalbe on term and will pay you back all premiums paid at the end of the term tax-free. Some policies allow you to add a spouse or a small amount for your children.
Here's how you can learn more about the benefits of life insurance
The life insurance policy can provide a lifetime annuity as a settlement option. It can also allow for tax free withdrawals that are not subject to taxation.
Additionally, you can receive the long-term income without a loss of Social Security benefits.
Life Insurance Policy proceeds are usually not subject to income taxation, although they can be so incumbered. Life insurance will pay an "income tax free" death benefit to a beneficiary or beneficaries of your choice. However you can't just name anyone as a beneficiary, there must be an "insurable interest".
Common exclusions of a life insurance policy may include:
- Suicide in the first 2 years
- Death during the commission of a felony
- Death as a result of war, declared or undeclared
Most life insurance policies have a terminal illness benefit, where you can access the death benefit while you are alive in the event of a terminal illness, which is typically anywhere from 1 year or 6 months or less to live.
Some policies also contain "living benefits" that allow you to access the death benefit while you are alive in the event of a chronic (long-term care) or critical (heart attack, stroke, organ failure, ALS, etc.).
Some other common life insurance policy riders are "waiver of premium" which will waive your premium in the event of a disability (after 90 days). Disability income that pays you an income after 90 days for a period of anywhere from 2-5 years. Return of Premium, only availalbe on term and will pay you back all premiums paid at the end of the term tax-free. Some policies allow you to add a spouse or a small amount for your children.
Here's how you can learn more about the benefits of life insurance
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