Benefits of Life Insurance: What You Should Know

Closeup of life insurance form

Benefits of Life Insurance

Most of us have not learned about the added benefits of having life insurance outside the obvious reason of being insured in the event of death. However, there are added benefits to insurance policies for the living. Having insurance leads to having added benefits we should be aware of: Tax Deductions, Insurance as an investment, Insurance as a savings plan, Cashback policy, and Estate planning. Whether you’re self-employed, a business, or an individual, the expense of insurance today has many added benefits tomorrow. Doing your due diligence is key to choosing what insurance expense is right for you given your goals.
  • Tax deductions

You may be able to claim a tax deduction if your total healthcare costs for the year are high enough. Also, self-employed individuals may be qualified to write off their health insurance premiums if they meet certain criteria.
  • Insurance as an investment

Investment policies that double as investments are known as ‘Insurance Investments’, where part of your premiums eventually becomes investments after a certain period of time. As the value of your premium grows, so does your investment. While your insurance premium remains untouchable and dedicated exclusively to the items listed in your policy coverage, you can dip your hands into your investment funds once in a while. This is a great option to have especially if you ever need emergency funds, including additional money for your children’s schooling, your retirement, or even if it’s just for your much-deserved vacation.
  • Insurance as a Savings Plan 

Insurance savings plans provide much-needed flexibility.  You can withdraw money from your policy to support major or minor events in your life without you having to surrender your policy.
  • Cash Back Policy

If you outlive the term of your life insurance policy, you can be returned your premiums. This creates a guaranteed payout as either your beneficiaries receive the death benefit payout based on your policy or you outlive your policy and your premiums are returned to you.
  • Estate Planning

Life insurance proceeds can be used to pay debts, taxes, and other estate costs so that estate asset, such as registered retirement savings plans (RRSPs) or registered retirement income funds (RRIFs) are not eroded to pay these expenses. Capital gains tax, tax associated with registered plans, estate taxes, and probate fees can all be covered by life insurance. Before signing on the dotted line for your business or personal insurance, ensure you are getting the best option available to you. Your insurance needs to be readily convertible into an asset that works for you when you need it without issues from the insurer. Visit TheFinRoute to connect with experts and agents who can help you choose the best policy for yourself and your business.