Sunday, August 23, 2015

10 Ways to Use Life Insurance

The following is a guest article by Richard Bibbee.

Life insurance is there for your family
when the unexpected happens. But it can also do more.
Here are some common ways – and a few ways that are more
unexpected – to get the most from your life insurance protection.
Ask yourself the following questions to see what uses may
be right for you.

Here are some common ways – and a few ways that are more
Life insurance can be the most cost-effective way to protect your
business if the owner dies or becomes disabled. Without a plan,
your family could be forced to sell the business, perhaps for a
fraction of its value. Life insurance can help provide cash for a
properly structured buy-sell agreement. This agreement will
protect the business and the family if the unexpected happens.
In 2010, the average cost of a funeral was $6,500, not including
cemetery plots, monuments or other items like flowers, prayer
cards and obituaries. According to the Federal Trade Commission,
the average funeral can easily exceed $10,000.

Although many people think life insurance is complicated,
it can be simple to help your family pay for funeral costs, doctor
and hospital bills, attorney’s fees, and other probate expenses.

Modern Woodmen’s Simple Application offers an easy way
to apply for up to $25,000 of quality whole life insurance by
answering five quick questions – no medical exam required
(Issue is not guaranteed; may depend on answers to health questions.).

If you are planning to leave any of your retirement savings to your
loved ones, your beneficiaries will be responsible for the income
taxes due on withdrawals they receive from your retirement
accounts. Instead, take small withdrawals from your retirement
savings while you are living.
You can then use some of that money to purchase life
insurance, which will provide your beneficiaries an income tax-free
benefit upon your death.

Your estate is more than just money. Your legacy may include a
family business, collection or home – assets that are not easily
divisible between heirs. Life insurance can provide liquid cash,
helping replace the value of a portion of another asset. And the
benefit is income tax-free.

Life insurance can be the gift that keeps on giving. You could use
your insurance to structure a gift that will provide for your favorite
charity well into the future. You can designate a charity as the
beneficiary to provide a gift upon your death, while maintaining
control of the certificate during your lifetime.

According to LIMRA studies from 2010, seven out of 10 U.S. families
with children under age 18 would have trouble paying bills
immediately or within a month or two if the primary wage earner
died unexpectedly. Avoid this with adequate life insurance
protection. Life insurance can help ease financial stress after an
unexpected loss of a loved one by providing for necessary living
expenses – food, clothing, education, utilities and transportation.
Some people rely on their retirement savings and pensions to
provide for their families after their death. But with life insurance,
your loved ones can use the death benefit proceeds to cover
final expenses, replace income and/or as an inheritance.
You can use your retirement savings for your dreams and
plans while you are living. Life insurance can provide for your
loved ones after you’re gone.

Life insurance provides money when your family needs it most.
There are other expenses that your loved ones will be responsible
for if you die prematurely, including monthly housing costs and
ongoing debts like car loans, college loans and credit cards.
These expenses would be faced without the additional support
of your paycheck. Some families find these debts too much to bear
and are forced to sell their home and other assets. Life insurance
can provide immediate cash to help leave your family debt-free.
While you may be healthy enough to qualify for life insurance
today, your health can change. Protect all members of your
family with life insurance now so that coverage will be in place
regardless of their health in the future.

Permanent life insurance builds cash value. You can borrow or
take a withdrawal from the surrender value to help purchase
a house, pay for college or cover financial emergencies. Flexible
loan-repayment options are available. Surrender charges may

apply to withdrawals.

Richard L. Bibbee, FICF is a District Agent for Modern Woodmen of America
Learn more at his Facebook page,