Welcome to Naples Life Insurance & Annuity Advisors’s blog! In our blog posts, we cover topics relating to life insurance, annuities, and other relevant themes. Lately, we have been covering debt after death and, more specifically, credit card debt and what happens to it after death. To summarize, debt doesn’t go away after death. It is passed on to a person’s heirs just like everything else. Oftentimes, assets of the estate will be sold off to pay for the the deceased’s debt and then if there is any remaining debt it may be left up to the heirs to pay it. To put it plainly, if you have no means to provide for your loved one after you die and you have debt as well, you are setting your beneficiary up for a difficult road ahead. Life insurance can be key to avoiding these pitfalls.
Life Insurance & Debt After Death
Life insurance can play some key roles when you are paying for debt in life and when your beneficiaries are paying post-mortem expenses such as your leftover debt, as well as burial expenses and more. However, the type of life insurance that you should invest in depends on your needs. There are two types of life insurance: term and permanent life insurance. Both types can provide benefits to you both now and later.
Term Life Insurance
Term life insurance does exactly what is indicated by its name. It provides funds for a term or time. Traditional term life insurance provides funds for a certain amount of time. Term life insurance is available in amounts of 5, 10, 20, 25, and sometimes 30 years and usually, with the option of extending your policy beyond the previously agreed upon term. However, term can do so much more for you than just provide money for a specified amount of time. Some policies do have a lump sum cash value and others can be converted into a permanent policy.
Permanent Life Insurance
Permanent life insurance provides other benefits such as a cash value, the ability to accumulate money on a tax-deferred basis, the means to pay off estate taxes when you pass away and more. Permanent life insurance provides a few more options than term does:
Universal life Insurance
Universal life insurance is one of the most basic types of permanent life insurance policies. When you invest in one of these types of policies, your cash value can grow each year allowing you to withdraw cash when a certain amount of time has passed and pay your spouse or beneficiary for the loss of your income when you pass away. Universal life insurance can be a great policy for anyone planning their estate and for those who may require their policy to meet a special need.
Universal life insurance is just the tip of the iceberg. Read our next blog post, the conclusion to this current blog series to learn the basics of other types of permanent life insurance and how they can work for you.
Ready to Prepare For the Future?
Are you ready to prepare for your family’s future. Contact Naples Life Insurance & Annuity Advisors today! We have over thirty years of experience and the expertise to help you find a policy that will serve your needs. Visit our website to learn more about us, to sign up for our newsletter, and schedule an appointment.