Life insurance provides several financial benefits for you and your family. Here are some of the benefits:
- Lump sum death benefit: If you pass away, your heirs receive a lump sum, tax-free payout from the policy. They can use this money to pay your final expenses and to replace your income 12.
- Coverage for chronic and terminal illnesses: Some policies pay out if you develop a chronic or terminal illness 1.
- Savings for retirement: Some policies provide savings you can use to support your retirement 1.
- Tax-free payouts: Life insurance payouts generally are income-tax free 1.
- Coverage for nursing home care: Some policies could also pay if you go into a nursing home 1.
It’s important to consider the financial strength of the life insurance company that issues the policy when selecting a life insurance policy. State guaranty funds may pay claims if the issuer can’t 1.
I hope this helps! Let me know if you have any other questions.
1: Investopedia. 2: Forbes Advisor.