Using life insurance to complement your retirement plans is a great investment. Unfortunately, many people forgo life insurance because they think it’s too expensive, but that’s not the case.
There are numerous options for everyone, and the benefits of investing in coverage against the worst-case scenario can have a large payout to support your dependents and loved ones indefinitely.
1. Insurance Benefits are Tax-Free
One of the best things about life insurance payouts is that they are entirely tax-free. That means the value you’ve arranged with the insurer will be paid in full if the insured person passes away.
Any tax-free benefits are great options for retirement, just like an IRA or 401k. You know what to expect, and it’s not changing yearly, depending on the taxes you might need to pay. Untaxed payouts are a great help when budgeting for your future.
2. Covering Final Costs
Undeniably, when a life insurance benefit is paid out, there are some priorities that have to be addressed. For example, the national median cost of a funeral with a viewing and burial was $7,848 as of 2021. Most people have very little saved as far as emergency expenses, and the costs of giving a loved one a proper ceremony can put people into debt.
Instead of borrowing money, having a life insurance policy that pays out allows those left behind an accessible fund to use for final costs. This not only makes it easier to pay for, but provides peace of mind in the time leading up to a loved one passing away. There are also some benefits, at an additional cost, that cover for expenses should there be a case of terminal illness involved. This can potentially cover costs such as medical treatment, in-home care and assisted living.
3. Peace of Mind
With life insurance to supplement your retirement plans, you choose to assure your family that you will still support them and provide security, even in the worst-case scenario. This peace of mind means money won’t get between you and your loved ones in the last moments, and the people you care about most won’t have to change their lifestyles because you are not around.
Peace of mind is rarely something you can pay for, and it’s more affordable than you might think. Matador Insurance has options to give you the security you need. There’s no better time than now to plan for your future.
4. Return on Investment
The return on investment for life insurance plans is not only a safe bet, but often a financially profitable one. This is because the conditions of the benefit are very clear, and with an untaxed payout, the process of receiving the funds is generally simple. In addition, if the insured person is in good health with a good medical record, often the price to pay annually is very little compared to the payout.
Experts suggest that life insurance benefits equal 7 to 10 times a person’s annual income. With that amount, your family and those who depend on you will be covered and allowed to live comfortably on the money the insurance provides after you pass away.
5. Putting a Dent in Big Bills
Families often have debt hanging around. Whether it’s a mortgage, student loan debt, or otherwise, there are plenty of bills people would love to pay down, given the opportunity. A lump-sum payout from a death benefit provides the capacity to reduce the family’s debts.
Life insurance provides an upside to an often challenging situation. Planning with your insurance expert to have enough money to make a big impact on the financial lives of your loved ones is much easier than trying to do the math alone.
Complimenting Retirement Savings
By paying for life insurance, you can supplement your already existing retirement plans, such as a 401k or IRA. And with the payout from a life insurance policy, you can cover yourself in case your savings haven’t yet reached a point where your dependents could live on without major disruption. It is important to note that you should not look to a life insurance plan as a substitute for retirement plans.
This security isn’t just a failsafe; it’s a smart investment. It could be that your policy doesn’t amount to much cost annually, even for a large payout. The important thing is to understand what you’re paying for, and the best way to do that is to talk to experts.
Finding the balance between different coverages can be tricky. If you’re worried about your family in the case of an incident, make a proactive choice and reach out to Matador Insurance. With experts explaining each choice in detail and carefully weighing the best options, you’ll have the peace of mind to enjoy the years leading up to retirement.