You are the beneficiary of your own life insurance plan. How awesome does that sound? Use the various living benefits that life insurance policies offer you, your loved ones and your business while you are still thriving.
A life insurance plan provides enormous advantages for your legacy recipients, but it also provides advantages while you are still living. Here are some of the lesser-known living benefits of a life insurance.
An accelerated death benefit can be a feature of your term or permanent life insurance plan. This allows you to gain access to some of your death benefit payout if you suffer from a detrimental or terminal ailment.
For example, if you experience a critical or terminal illness at age 75, you can receive aid for expenses with an accelerated amount from your policy. Unfortunately, medical crises occur and people are unprepared for the mounting bills that accompany them.
One out of three families say that they would be in dire financial straits within one month if their head of household suffers an untimely death.
Many permanent life insurance plans provide annual dividend payments as part of your living benefits. They are based on the company’s profits; therefore, they will vary. You can choose to receive the dividends as cash or apply them to any applicable loans against your policy.
Reducing your premium or obtaining more insurance coverage are two more options. A deduction in dividends may occur due to outstanding policy loans.
Cash value is another factor in the living benefits of a permanent life insurance plan. This particular life insurance plan is a vital financial tool that accumulates wealth prior to your death. Factum Financial can guide you on borrowing from this plan to cover life stage needs such as tuition, mortgages, small business loans and more.
An approval process is not required and the value of your policy does not decrease. However, certain stipulations apply regarding how long the policy has been in effect. Also, the loan incurs interest, and if not repaid before your death, the balance is taken from the policy.
Term life insurance does not have an accumulated cash value feature.
Earnings from your policy are tax-deferred. Another living benefit to enjoy. Cash value proceeds are not taxed until your withdrawals exceed your cost basis (what you’ve put into your policy). Secondly, there are no penalties for borrowing against the cash value of your policy, and you will still continue to earn dividends.
Thirdly, the dividends are a tax-exempt premium overpayment. Fourth, the balance of your cash value is exempt from college financial aid qualifications. Many colleges and universities offer Free Application for Federal Student Aid (FAFSA), which does not count home equity, specific retirement assets, annuities or the cash value of your life insurance policy.
Flexible Retirement Funds
If you are close to the retirement stage, you should focus on growth rather than income. Factum’s income-based strategies will stabilize your retirement in a more rewarding manner. Don’t fall into the conventional Wall Street trap of uncertainty.
Bank on yourself with our proven methods that will stand up to any economic climate. We roll out the same plans that over 90 percent of wealthy banks use for their liquid assets.
Establishing generational wealth for our clients is a strength of ours. We believe that everyone has a valuable legacy to leave behind for their loved ones and industry peers. However, many people do not know how to effectively pass it on to their descendants.
Factum Financial will prepare you and your loved ones for such an occurrence. Whether your objective is to build your assets, increase your cash flow or decrease taxation, we can substantiate your long-term growth.
Contact one of our wealth strategists today, so we can jump start your living benefits.
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