Welcome back to Naples Life Insurance & Annuity Advisors’ blog! Lately, we have been discussing what happens to our debt after we die. Unfortunately, it doesn’t just go away. Your debt will most likely be passed on to your beneficiary unless it can be covered by the assets of your estate which can include those precious antiques that you plan to pass on to your family. Life insurance can be a means for covering whatever debt you may have when you die including credit card debt, a mortgage, et cetera. To catch up on what we have covered so far, read our previous blog posts or keep reading to learn more.
Types of Permanent Life Insurance
In our last blog post, we began to discuss types of permanent life insurance and dissect the basics of universal life insurance. Universal life provides a cash value or lump sum and can be a great option for those who are estate planning and may have special needs for their insurance policy to provide. Keep reading to learn about the other types of permanent life insurance and the benefits they provide.
Whole life insurance
If you have heard about life insurance, you have probably heard of whole life insurance, for it is one of the most well-known policy types on the market. Not only does it build cash value, but this policy can also be a great way to cover large, unexpected expenses.
Indexed life insurance
Indexed life insurance, like all permanent or universal life insurance policies, provides a cash bucket. However, the money of this policy grows based on an indexed performance that is chosen by your financial advisor each year. The indexes that determine the growth of your investment is dependent on a stock index that will reflect the stock market. This type of policy is not for the faint of heart, but for those who have a greater ability for risk.
Variable life insurance
Variable life insurance is a lot like your indexed life insurance policy because it grows based on a variable of your choosing. With this kind of policy, you are able to decide how you want your cash value to grow, as well as the death benefit and premium payments that work for you.
Choosing the right insurance policy depends on what your needs are and your financial priorities. Each type can provide exceptional benefits. Keep reading to learn more about how each type of policy can help you.
How Life Insurance Can Work For You
In conclusion, term life insurance can be a great means for not only paying for big unexpected expenses now, but providing the money needed to pay off debt. Purchasing a term life insurance for the amount of time that matches your mortgage can be a great way to guarantee that if you pass away unexpectedly, your spouse or other beneficiary has a means to pay what is left. However, with each year that you pay for your mortgage, your term decreases and eventually expires.
A permanent life insurance policy, on the other hand, can be beneficial in that it can provide a large sum of money to your beneficiaries to pay for expenses such as your funeral, estate taxes, and possibly your debt. You can, in some cases, also withdraw funds from your policy to pay for large expenses such as debt. However, keep in mind that when you withdraw, there will be less money in your policy to provide to your loved ones.
Ready to Invest?
Not sure what you need or how you can not only live well now, but also take care of your loved ones later? Contact Naples Life Insurance & Annuity Advisors! We are financial advisors that have more than thirty years of experience and the expertise to help you find peace of mind. To learn more about us and to set up an appointment with us, visit our website! Don’t leave your future or the future of your loved ones up to chance! Speak to a financial advisor today!