Shanley Insurance Agency Blog |
Most people think life insurance is in place only after the policyholder passes away by providing money to help cover expenses and to help your family financially. But, you can also benefit from life insurance while you’re still alive. Specific life insurance plans can help provide much more than just a death benefit. Here are 3 ways:
Life Insurance to Help Supplement Your RetirementOne of the most popular plans to use for this is called Indexed universal life. Indexed universal life or better known as (IUL) insurance is a form of permanent life insurance that offers a cash value component along with a death benefit. The money in the cash value account can earn interest through tracking an equity index such as the S&P 500 selected by the policy holder. One of the best parts about this plan is you can never earn less than “0”% on your cash value account no matter how bad the equity index chosen performs. You can never go backwards with your cash value due to any down year with this index, Basically “Zero” is your hero during any bad year which means you never will have to recover any previous losses. When you get ready to retire you don't have to pay taxes on the money you eventually draw from the cash value of the IUL. It's similar to a Roth IRA in this respect. Also, some plans today now even have a rider that provides a Guaranteed income for life. All of this plus death benefit protection for your family in the event of death. You can have your cake and also eat it with this type of life insurance policy. Life Insurance for Long-Term Care ExpensesAccording to 2020 data from the Department of Health & Human Services. Almost 70% of 65-year-olds today will need long-term care services (such as in-home care or assisted living facilities or nursing home care ) during their lifetime. Depending on the type of care and where you live, these costs will easily be thousands of dollars each month. The average nursing home annual costs are over $100,000 today with at-home care costing more than $50,000 or more annually. The average long term care claim is almost 3 years long with total average claim amount being close to $300,000. This is a large sum of money that most families will not be able to cover. By adding a long term-care insurance rider to your life insurance could help cover these costs and, prevent your family from trying to pay out of pocket. While long-term care insurance is available as a separate policy, it’s generally also available as an add-on to a life insurance policy with a number of companies. This rider can help you pay for care up to a certain amount each month (usually 2% to 4% of the face amount chosen for long-term care coverage each month) These types of plans are usually preferred because prices are locked in once policy is issued. Traditional stand alone long-term care plans have had and will continue to have regular rate increases as time goes by. Having a long-term care rider with your life insurance policy guarantees your premium dollars will never be wasted. Which is a common concern with stand alone Long-term care plans because with most plans if you never needed care you would have lost those premium dollars. Life Insurance to Help Cover a Qualifying Critical or Chronic IllnessIf you’re diagnosed with a critical or chronic illness (Cancer, heart attack, stroke, alzheimer’s, etc’) your policy can include an accelerated living benefit rider. This rider can allow access to use a portion of your death benefit of your policy to help recover physically & financially while you’re still alive. The more any covered illness reduces your life expectancy the larger the offer from the insurance company. Did you know that a majority of bankruptcies each year are caused by large medical bills due to a critical or chronic illness? Having accelerated living benefits on your life insurance can help protect you & family from this happening. Also, another living benefit of most policies include is a terminal illness rider. If you were diagnosed as being terminally ill (having anywhere from 12 to 24 months to live depending on the company) you can also accelerate a large portion of your death benefit while still alive. Using your benefits through an accelerated living benefit rider will likely reduce the amount of money your beneficiaries receive when you die. But it could be helpful for you to make the most of your time and cover related expenses while you’re still living. Bottom lineMost people believe life insurance is mainly in place to help cover expenses and help your family when you die. But, in several different situations, life insurance can be used to help you cover expenses, replace lost income, supplement your retirement and help provide care for yourself if you were to get sick. For a schedule a "Free Consultation" to discuss how life insurance can be used for more then just a death benefit contact our office:
www.shanleyinsuranceagency.com/free-consultation.html
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