Four benefits of life insurance you might not know about

By Soko Directory Team / Published October 2, 2022 | 12:07 pm

Permanent life insurance policies can offer tax breaks

Permanent life insurance policies can offer tax breaks in the UK, as long as they are held within a specialized trust. These trusts are designed to shelter the policy from inheritance tax and can also offer other benefits, such as income tax relief.

For example, a trustee can elect to have the policy payout paid directly to the beneficiaries, free of any inheritance tax. Your loved ones could potentially receive a larger lump sum of money than if the policy was subject to inheritance tax.

There are several points to consider before taking out a permanent life insurance policy, and seeking professional financial advice is recommended. However, if you want to provide financial security for your family after you die, then a permanent life insurance policy could be the right choice for you.

Any reputable life insurance broker will tell you that safeguarding your family against the financial burden of a loved one’s death is only one of the benefits of life insurance. This article will provide you with four pieces of advice you might not have known.

Permanent life insurance can allow you to borrow against the policy’s value

Permanent life insurance can be a valuable financial tool for its death benefit and the cash value it builds over time. You can access this cash value through policy loans, which act as a source of collateral-free funding.

Policy loans come with interest, which is charged back to the policy’s cash value. However, this interest rate is usually lower than what you would find with other types of loans, making policy loans an attractive option for those in need of extra funds.

Best of all, policy loans do not have to be repaid until the policyholder dies or surrenders their policy. This means you can use the loan proceeds for any purpose you see fit without worrying about making monthly payments.

If you’re looking for a way to access the cash value of your life insurance policy, consider taking out a policy loan. It could be just the financial tool you need.

You can use life insurance as an investment tool since the money paid into a policy can grow over time

In addition to providing peace of mind in the event of your death, life insurance can also be used as an investment tool. The money that you pay into a life insurance policy can grow over time, providing you with a nest egg that can be used for various purposes, such as retirement income or college tuition expenses.

You can choose from different types of life insurance policies that offer different levels of coverage and have different features. Some policies even offer cash value accumulation, which allows the policyholder to borrow against the policy’s death benefit. Take the appropriate time to consider all of your options before purchasing a life insurance policy.

When used as an investment tool, life insurance can be a great way to provide yourself and your family with financial security. Remember that life insurance is not an investment in the traditional sense. The money you pay into a policy is not invested in stocks or mutual funds, so it will not grow at the same rate as other investments. However, over time, the cash value of a life insurance policy can grow significantly, providing you with a valuable resource to tap into when needed.

Term life insurance is more affordable and can be a great way to protect your loved ones financially if something happens to you

Term life insurance is often less expensive than whole life insurance because it does not require you to pay premiums for the entire length of your life. Whole life insurance policies do not have a set term, which means that you will be required to pay premiums until you die. This can be expensive, especially if you live to be very old. Term life insurance gives you the peace of mind of knowing that your family will be financially okay if something happens to you without requiring you to keep paying premiums forever.

Term life insurance is a more affordable way to protect your loved ones financially if something happens to you. It can be a great safety net for your family in case of premature death. Always shop around first and compare different policies before choosing one, and make sure that it is affordable for your budget.

Finally: Review your life insurance policy regularly and update it as your needs change

Your insurance needs to change as your life progresses. Regularly check your life insurance policy to ensure it stays up-to-date and that you’re adequately covered. This will guarantee that you and your family are always safe.

It’s crucial to choose an appropriate life insurance policy amount when you first take out a policy. This will ensure your loved ones are sufficiently cared for financially in the event of your death. However, as time goes on, your family dynamic may change – say, you have more kids or pay off your mortgage. As life happens and changes occur, it’s important to readjust your life insurance coverage so that it still meets the needs of those who depend on you.

It is generally a good idea to review your life insurance policy at least once every few years. This will ensure that it still meets your needs and that you are not paying for more coverage than you need. If you have questions about whether your policy still meets your needs, contact your life insurance agent or company. They will be able to help you determine if you need to make any changes to your policy.

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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