Life insurance is often thought of as something you buy to protect the people you care about if you die. Viewed that way, the premiums you pay can seem more like an expense than an investment.
But life insurance can also play a broader role in your financial plan. Knowing that your family, beneficiaries or business interests are protected can give you more flexibility in how you use your money as you age and approach retirement.
In that sense, the value of life insurance isn't only about what happens after you're gone. It's also about what having that protection can allow you to do while you're here.
There are many ways to protect your family and your business interests. The key is having the right combination of coverage for your needs.
Protecting your family
The younger you are, the less likely you are to have accumulated substantial assets that could be passed on to your family or used to pay off debt. And the cost of passing on the assets you do have can reduce what ultimately goes to your beneficiaries.
Life insurance can provide a cost-effective and tax-efficient way to help protect your family and their financial well-being. A guaranteed payout could be used to:
- Pay off your mortgage.
- Pay off other outstanding debts.
- Replace your income.
- Pay for your children’s education.
- Provide cash to pay probate fees and taxes without needing to liquidate assets.
As your financial situation changes, it's worth reviewing whether the amount and type of coverage you have still meets your needs.
Protecting your business
If you're a sole practitioner or a member of a small firm, life insurance can also help protect your business interests.
It can be used as collateral
A term life insurance policy can be assigned to a lender as collateral for a loan or line of credit. Upon your death, the insurance company would pay the loan balance, with any remaining insurance benefit paid to your beneficiaries.
If you anticipate needing business financing, talk to a Lawyers Financial advisor about coverage options that may be appropriate for your situation.
It can help in business succession
If you're a partner in a law firm, you may have a buy-sell agreement that addresses what happens following the death of a partner.
Life insurance can help fund the terms of that agreement in a straightforward, cost-effective way, allowing the remaining partners to focus on the business.
Is life insurance worth the cost?
Life insurance is ultimately about protection. But that protection can be an important part of a broader financial plan, giving you more options while you're alive while still providing a guaranteed payout to your beneficiaries.
Whether you're considering coverage for the first time or haven't reviewed your existing policy in a while, we can help you find coverage that fits your needs.
Ready to explore your options?
Get a term life insurance quote online and see what coverage could cost you.
Prefer to talk it through? A Lawyers Financial advisor can help you assess the amount and type of coverage that makes sense for you.
