Expert Advice: GreenSprout Shares What you need to know about Life Insurance 

Chris Turn on July 30, 2022

Most people believe that the best means through which a person can make provision for their family, friends, or anyone is through a will. This is not true, as the underlying requirement of having a property or money to devolve in a will and the cost of making a will is not particularly encouraging. An estimated amount of 60% of the US population has no will. 

Notwithstanding, there are diverse schemes or arrangements through which a person can make provisions for their loved ones upon their demise. One of such means is life insurance. In this post, we have the representatives of GreenSprout to share with us what we need to know about life insurance. 

GreenSprout is a financial blog that offers insights on how to make better financial decisions

Can you quickly walk us through the nature of life insurance and the particular benefits attached to life insurance?

Life insurance is an arrangement in which a person pays regular premiums for an agreed sum which would be paid to his beneficiary upon his death. Essentially, life insurance provides financial security for your loved ones in the event of your passing.

Life insurance is beneficial for so many reasons. It provides protection for the beneficiary and is a good law-abiding tax avoidance measure. The death benefit of a life insurance policy is usually not taxed.

Is life insurance really for everyone, or can it be said that it is designed for a particular type of situation? 

Life Insurance is a scheme particularly designed for people who have financial dependents. Although it may not be the case that the beneficiary will suffer financial hardship, it may be a gift to support any individual. 

For that reason, the persons that fit into this category include couples expecting a new baby, parents with minors, seniors with younger dependent siblings, adults with dependent parents, families who cannot afford funeral expenses, parents with special adults, and more.

Perhaps, it can be said that there are different forms of life insurance policy?

Yes! There are particularly two forms of Life insurance policy, term life and permanent life. A proper understanding of the distinction between them will help you in making a choice of an insurance policy based on your personal objectives.

Like every other insurance policy, a lot of thought processes must go into the decision-making on life insurance. Are there factors one must keep in mind while seeking to create a life insurance policy?

There are many elemental factors to consider when you intend to create a life insurance policy. But the key consideration when making a decision to a buy life insurance is the purpose of such purchase. 

When you consider the reason you want to get a life Insurance, you will be able to determine which type of life insurance policy to go for, the amount of money that will go into it, and the terms of the insurance policy. 

Can you give us a guide on how to get started?

The key reflections a person must consider before proceeding to buying a life insurance policy have been discussed earlier. But one cannot displace the role of a high-end professional guidance. 

With the wealth of resources from GreenSrout’s website, the roadblocks a person may encounter while trying to secure a good life insurance policy are laid to rest. 

How Life Insurance Can Preserve Your Family’s Wealth

Jeff Short on October 30, 2020

Can life insurance act as a wealth strategy for your family? The short answer is “yes,” but a more detailed look at this question reveals that there are some clever, strategic ways you might implement life insurance to help protect your family and your assets. Today, we’ll be taking a look at how you can put life insurance to work in preserving your family’s wealth.

Protecting Your Business

Let’s say you have a business. What will happen to that business and the income your family was relying on in the event of your passing?

You need to have a plan in place to ensure proper business succession and that your family can be compensated. This is where something like a buy-sell life insurance agreement might enter the picture:

  • – You select a successor for the business
  • – You create an agreement that establishes a suitable value for them to
  • buy the business for should you expire
  • – Successor purchases business for agreed upon price using payout from life insurance
  • – Your heirs receive compensation and don’t have to worry about what happens to the business

And this is but one example of life insurance protecting your family. You might also use insurance to help replace lost income in other circumstances, which is what we’ll be taking a look at next.

Life Insurance And Lost Income

Perhaps you have a successful job where you’re making plenty of money and providing for your family. You’ve got some years left until retirement, though, and this could pose a potential risk to your family.

Should anything happen to you, a large chunk of your family’s revenue is out the window, but life insurance could help make certain your family would still have money coming in. If you plan out your yearly income, multiplied by the number of years you have left until retirement, you can work out an amount that would protect your family should you pass and cannot provide a steady income.

Other Ways Life Insurance Fits Into A Wealth Strategy

In addition to making up for lost income, life insurance can present you with several other advantages as part of your wealth-building strategy:
– It can provide a substantial death benefit payment for beneficiaries with relatively low premium payments
– Those benefits will not decline as long as you pay your premiums
– Death benefits are often tax-free
– Funds from life insurance are divorced from future equity and debt markets
As part of an overall plan to preserve wealth for your family, life insurance is one component that you shouldn’t overlook, so make sure to do your research on what kind of policy would best benefit you and yours in the long-term.