4 Hidden Benefits to Owning Life Insurance

Life insurance possesses a multitude of benefits that extend beyond common knowledge.?

Our SMD Eduardo F Azcoitia shares 4 hidden advantages that make owning insurance a valuable asset.

Hidden Advantage No. 1: Tax Benefits

Recent revisions in tax laws have significantly enhanced the tax advantages associated with life insurance. Life insurance proceeds typically remain exempt from income taxes. Consequently, beneficiaries are relieved of the additional tax burdens on their inheritance.

Hidden Advantage No. 2: Estate Planning

Life insurance aligns harmoniously with estate planning, as both endeavors share the objective of providing for loved ones in the event of one's passing.?

The tax benefits offered by life insurance make it an especially enticing tool for transferring wealth to the next generation.?

?Life insurance can also prove valuable in settling an estate with assets that are difficult to divide, such as property or a family business. Additionally, it can facilitate funding buy-sell agreements in the event of a business partner's demise or provide child support or disability care through a trust.

Hidden Advantage No. 3: Long-Term Care

Long-term care can be a costly endeavor, particularly for individuals aged 65 and above. The Department of Health and Human Services reveals that the average American turning 65 today can expect future long-term care expenses amounting to approximately $138,000.?

Hidden Advantage No. 4: Cash Management

While the funds in a savings account are easily accessible, the interest earned on them is typically disappointingly low. If immediate access to cash is not a pressing need, a permanent life insurance policy, such as whole life insurance, may be a more beneficial alternative.

These policies enable the accumulation of cash value, which can be withdrawn or borrowed against as long as the policy remains active. Permanent life insurance policies experience tax-deferred growth, meaning the interest generated remains untaxed as long as it remains within the insurance policy.?