Nobody likes to think about life insurance, but it’s essential to have a policy in place if you want your family taken care of should the worst happen. What many people don’t realize is there are life insurance uses that go beyond covering funeral expenses. Here are some surprising tips for how to use life insurance to provide for your loved ones in ways that will impact them for years to come.
1. Pay Kids’ College Tuition
It’s no secret — the expense of college education means many people start saving early, when their children are barely walking. The good news: Life insurance can help cover the costs of higher education. If you have a policy in place, you can help defray soaring tuition costs should the unexpected happen. In the event of your death, the proceeds of your policy can be used for a variety of education scenarios.
2. Cover Mortgage Payments
In an ideal world, you would have paid off your mortgage before retirement, but that isn’t always possible. Put your family in a great position to keep the family home with a life insurance policy. Having one can protect your family from the obligations of making mortgage payments should your salary no longer be available to them.
3. Keep a Business in the Family
Certain taxes may apply when passing a family business to the next generation, and the next generation may not be in a financial position to pay them. This is where you can help. Life insurance for business owners can help cover those costs, easing the tax burden on the future owner of your business and your other family members.
4. Offset the Costs of Chronic Illness
A daily living rider can be a huge advantage when dealing with a debilitating scenario like chronic illness. If you become unable to perform necessary daily activities, such as dressing or bathing, you may have early access to your policy’s death benefit. The remainder goes to your beneficiaries when you pass away.
5. Pay for Elder Care
If you’re able to tap into the cash value of your life insurance policy, you could use that money to care for an elderly relative. While nobody can predict when a family medical emergency will arise, ensuring that you are financially ready will curb the stress when a situation arises.
6. Establish Legacy Planning
One of the benefits of life insurance is that it offers a source of tax-free money. If you choose to do so, this can help with making charitable contributions. There are several ways you can utilize your life insurance policy to make a lasting impact after you’re gone.
- Name a charity as a beneficiary of your life insurance policy.
- Gift the life insurance policy to a qualified charity.
- Gift policy dividends.
Learn the Many Benefits of Life Insurance
Keep in mind that all of these scenarios could have an impact on the death benefit, meaning they all affect what your family will receive. Ask your Farm Bureau agent about the ways your life insurance can work for you.