Many people use life insurance as a way to pay for their funerals and to pay off debts but they are not aware of the many benefits of using whole life insurance as an investment. With the current state of the economy and the collapse of Wall Street more people are looking for ways to keep their money safe.
Whole life insurance is one of the safest ways to keep your money safe. Whole life insurance is permanent insurance that will provide life insurance coverage throughout a person’s life. The premiums and death benefit of a whole life insurance policy remain fixed throughout the life of the policy. A portion of the premium is paid into a savings account and builds cash value. The insurance companies usually guarantee a minimum rate of return on the cash value portion of the insurance policy. In addition, most life insurance companies pay dividends toward the cash value portion of a policy. The dividends are considered rebates of insurance premiums according to the IRS and are not taxable. The only instance where dividends would become taxable is if the dividend amount exceeds the total amount the policy holder paid in premiums for the life of the policy. This instance is extremely rare. Dividends can also be used as “paid up additions” which provide additional paid whole life insurance policies in the amount of the dividends owed to the insurance policy owner. Cash value can be borrowed against when the policy accrues enough savings.
In closing, many people are looking towards purchasing Whole life insurance as an investment because it will keep their money safe along with the guaranteed rate of return that is offered. Many people do not want to speculate anymore in the stock market and instead want to preserve their wealth. Whole life insurance can help these people safely invest their money.
Tuesday, September 29, 2009
Wednesday, September 23, 2009
How Much Will Social Security Pay For Your Funeral and Why MA Life Insurance is important?
Many people mistakenly think that they will depend on Social Security to pay for their funerals but do not realize that Social Security only pays $255 towards their funeral. If you are a veteran VA will pay up to $1,500 towards your funeral. With the average funeral costing $6,500 it is important to have a plan in place to pay for your funeral so that your family members are not burdened with this expense.
Many people depend on their savings to pay for their funerals but do not realize that usually the last six months of their lives are extremely expensive due to healthcare, medications, and other bills that they may incur. Unfortunately, their savings can sometimes be wiped out at this time. Final expense life insurance was designed to pay for your funeral expense during this time of need. In many cases these payments are paid to the beneficiary within 24 hours after the funeral services are performed. Even if someone has traditional life insurance, final expense insurance may come in handy because traditional life insurance will not pay the beneficiary until the death certificate and other important documents have been received. This can take several months to settle a claim and can cause unnecessary fees and charges on the unpaid funeral balances. It is important to have a plan in place because no one knows when it will be time for them to pass away. Plan for the future so that your family members are not financially burdened during their time of grief.
Many people depend on their savings to pay for their funerals but do not realize that usually the last six months of their lives are extremely expensive due to healthcare, medications, and other bills that they may incur. Unfortunately, their savings can sometimes be wiped out at this time. Final expense life insurance was designed to pay for your funeral expense during this time of need. In many cases these payments are paid to the beneficiary within 24 hours after the funeral services are performed. Even if someone has traditional life insurance, final expense insurance may come in handy because traditional life insurance will not pay the beneficiary until the death certificate and other important documents have been received. This can take several months to settle a claim and can cause unnecessary fees and charges on the unpaid funeral balances. It is important to have a plan in place because no one knows when it will be time for them to pass away. Plan for the future so that your family members are not financially burdened during their time of grief.
Thursday, September 3, 2009
How to Receive MA Life Insurance Benefits Tax Free
Most people are not aware that when they purchase a life insurance policy to protect their loved ones in most cases the proceeds will be tax free. This is especially true for Term Life insurance policies. All of the life insurance benefits that are distributed tax free.
Term life insurance benefits are tax free because you will not accrue any cash value with this type of policy. If you purchase a whole life, universal or variable life insurance policy there are some restrictions. For instance, any amount of money that you contributed, gained interest on, or invested that is more than the death benefit will be taxed. So let’s say that your beneficiary received $150,000 in proceeds from your life insurance carrier. The death benefit was $100,000 but you had a cash value of $150,000. The $50,000 would be taxed because it is considered taxable income.
Many times when people begin their estate planning their advisor or lawyer will recommend life insurance as a tool to transfer family wealth without having to pay taxes. Some people with larger estates will create a life trust to help them transfer wealth to their families. Instead of them listing a family member as a beneficiary they will instead name a trust as the beneficiary which is often referred to as a life trust. The main objective in creating this is to pay for estate taxes or as inheritance to an heir.
Term life insurance benefits are tax free because you will not accrue any cash value with this type of policy. If you purchase a whole life, universal or variable life insurance policy there are some restrictions. For instance, any amount of money that you contributed, gained interest on, or invested that is more than the death benefit will be taxed. So let’s say that your beneficiary received $150,000 in proceeds from your life insurance carrier. The death benefit was $100,000 but you had a cash value of $150,000. The $50,000 would be taxed because it is considered taxable income.
Many times when people begin their estate planning their advisor or lawyer will recommend life insurance as a tool to transfer family wealth without having to pay taxes. Some people with larger estates will create a life trust to help them transfer wealth to their families. Instead of them listing a family member as a beneficiary they will instead name a trust as the beneficiary which is often referred to as a life trust. The main objective in creating this is to pay for estate taxes or as inheritance to an heir.
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