You've probably heard of using life insurance to protect family and loved ones. However, permanent life insurance can do more than that with its potential for cash value.
Here are three additional ways that life insurance can help.
Fund an education
Whether as a supplement to a college savings plan (like a 529 Plan) or on its own, a permanent life insurance policy can provide you with flexibility to meet college expenses by:
Using your policy’s cash value to take out tax-free loans to help pay for any college expenses (qualified or not).
Potentially qualifying for higher financial aid amounts because current FAFSA™ guidelines don’t count your life insurance policy’s cash value as an asset.
Provide income in retirement
A life insurance policy can be a key part of a retirement plan to help provide supplemental retirement income. Compared to Roth or traditional IRAs, a life insurance policy may allow you to save more with no caps on eligibility based on income. With a life insurance policy you may have access to:
Cash value through policy loans for retirement expenses when you need it. Many traditional retirement products have limitations on when and how you can access your values.
Potential dividends paid to you that can be used in a number of ways. While not guaranteed, certain life policies pay dividends to their policyholders.
Gift to grandchildren
Life insurance can be a way of leaving a legacy to grandchildren. Certain life insurance policies allow you to gift premiums. Over time, the tax-deferred savings in the policy might be used by the grandchild to:
Purchase a first home.
Start a business.
Supplement retirement income.
Provide a death benefit to their beneficiaries.
Finding a fit for you:
Life insurance will always be foremost a product where you can insure your life and name beneficiaries who would get a death benefit payment should the unthinkable happen to you. But it definitely is not one size fits all, so it’s important that you talk to a financial professional to determine the right fit for you.
Cosmo Insurance Agency is knowledgeable in various options including but not limited to – term, ROP, permanent and whole - from over two dozen A rated carriers. We are familiar with the rate classifications that particular carriers use to determine the health class of enrollees – and there are significant differences between them. No matter what the results of your medical examination are, we will find the insurer that will provide you will the best rating class and thus the lowest premiums.
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