There's More to Life Insurance Than Just a Death Benefit

​Let's have a show of hands - everybody who's reading this today loves to buy life insurance and pay lots of money for it, right? Lol…Nobody does. Nobody likes life insurance, they don't like to pay for it and, they don't like to talk about it. They get nervous when they know an insurance agent is going to try to talk to them about it. Did you know there is so much more to life insurance than just providing a death benefit?

When we think about life insurance, most people only think about the death benefit and, the premiums they have to pay for it. They think this is something that will never benefit me. But, the reality is life insurance can help solve so many more problems than just providing a death benefit.  Let's throw out just a few examples that probably many reading this had no idea could be done with a life insurance policy. 

Let's say you own a business and, you have a partner. You're both married and then one day your partner up and dies. Have you thought what would happen to the business at this point? Well, whether you like it or not, you just now have got a new business partner, your ex -partner that passed away’s wife.  Maybe she's a wonderful person but, she doesn't know anything about your business. But, she just became 50% partner in everything that you do, making 50% of the profit, making 50% of the business decisions. Then one day she might say, hey you're going to hire my son who is even less knowledgeable in the business and maybe less capable in that case. This would be a living nightmare!

Life insurance or what’s called a “Buy-Sell Agreement” is a great solution to have in place. This will make sure that if something happens to your partner or to you that your spouse is taken care of, or their spouse is taken care of and, most importantly not involved in the business. With the life insurance they are now bought out of the business giving you complete control. This way you're able to continue without the problems that come up with not having this planning done ahead of time.

Let's talk about other ways life insurance can help solve some major problems. Did you know there is a new life insurance policy "Living Benefits" that you don’t have to die to be able to use? We may be in good health today but, what happens if you or your spouse where to suffer a heart attack, stroke, chronic illness or traumatic brain injury etc. Did you know that having the right kind of life insurance can help you through this very difficult situation.  This new kind of life insurance includes death benefit protection but, also provides “Living Benefits” that in my opinion everyone should have. This coverage can help you survive financially if you were to suffer a critical or chronic illness. These types of plans cost no more than a traditional life insurance policy that only provides a death benefit. 

When someone suffers a stroke, heart attack or are diagnosed with cancer, the income that they are used to being there will in many cases stop being there. You may have the best health insurance coverage in the world but, health insurance won’t: 

• Pay your mortgage
• Make your car payment
• Pay for groceries
• Replace lost income

So even though your medical costs may be covered - there's going to be lots of things that it doesn't cover. Let's just assume everything is covered medically… your still going to have lots of other monthly expenses coming in without an income to pay them. Doesn’t it make sense to have something in place that will help protect you and your family in this type of situation? With "Life Insurance with Living Benefits" this new kind of life insurance today, if you were to suffer a heart attack, cancer, stroke, Lou Gehrig's disease etc, it can help create income for your family to make sure that it continues. So again, it's not just there to provide a death benefit. 

It's what happens while you are alive if something happens to you. You want to make sure you still have a life at the end when you get better. A lot of people unfortunately, have to go back to work early and are forced to go back before they're totally recovered. Wouldn't it be nice to have that time to get through it, to get healed, to get better without worrying financially? Can I hear an “Amen”…

Another example, let's assume you have an employee that you really like and don’t want to lose. In today's world with today's working environment, it's really hard to keep employees. So, what do you do to make sure that you can attract, reward, and retain key employees? Well, one way to do that is to provide a benefit and, life insurance is a great tool to do this with. You can say, hey, Mr. Key Employee, hey, Ms. Key Employee, you're doing a great job and we want you to be here for a long time. 

If you stay and you do this until your age 65, we're going to do this for you. But if you leave before age 65, we won’t be able to do this for you. It could either be a lump sum cash payout, it can be a lifetime income from this policy, depending upon what the owner of the business wants to do and the agreement that is in place for the employee. So, the owner and the key employee create an agreement that if  they do this, were going to do this for you. This is called "Key-Employee Insurance".

And once that happens, life insurance is a great tool to fund that. So, the owner puts life insurance on this employee, pays the premium with the owner of the business owning this policy. Plus, the owner can set things up to where either they are the beneficiary to help replace that lost employee or the dependents of that employee are the beneficiaries in the event of death.

Here is another use for life insurance that more and more people are taking advantage of.  You can purchase a permanent plan of life insurance that builds cash value overtime tax-deferred. Then when you get ready to retire, the accumulate cash value built up in this plan can now be used in a way to help supplement your retirement.  At this time you can receive a "Tax-Free Retirement" income from this accumulated cash value from this life insurance policy.

Now I hope you can see that life insurance can be used in so many other ways. For tax-free growth, tax free access for retirement along with a tax-free death benefit. Can help provide money to help you survive a critical or chronic illness that can replace lost income, pay for groceries, make the mortgage payment etc. Provide a financial benefit for a key employee that rewards them for staying with you.  All of these examples show how life insurance can be used which makes this a wonderful tool that can go far beyond than just providing a death benefit. Life insurance is the only financial tool that “Takes Pennies and Guarantees Dollars”.