How Life Insurance Can Help Take Care of The Unexpected
Jul 15, 2024
2 min read
Life insurance gives your family important protection in case you’re not there to provide for them someday. But there are other uses of life insurance that can help, too. If you’re asking yourself, “What can I do with life insurance?” here are some times when it might be helpful.
What Can Life Insurance Be Used For?
Some personal uses of life insurance may help with your finances.
Long-Term Care Expenses
With some policies, you can access money to pay for long-term care expenses like help with daily activities or care in a nursing home. So, if you need this type of care, you may be able to use some of your life insurance benefits.
Chronic or Terminal Illnesses
In some cases, you can use a life insurance rider to receive benefits if you’re diagnosed with a terminal illness or a chronic illness. You may want the money to travel while you’re still healthy enough, pay for medical bills or pass on to your heirs while you’re still with them.
Retirement Income
You might be able to use life insurance while you’re alive to supplement your retirement income with the cash value you’ve built up in your policy. You may be able to take out a loan against your policy’s cash value. These loans are usually received tax-free.
Cash Withdrawals
You may also be able to withdraw money from the cash value of the life insurance policy to use for the down payment on a home, a child’s education, a financial emergency or another reason. You may have to pay income taxes on these withdrawals.
What Are Business Uses of Life Insurance?
Your life insurance isn’t just valuable to you personally. If you run a business, there are ways you can turn to your life insurance policy.
Buying Time to Sell Assets
If your business will be liquidated after your death, life insurance can buy some time. That way, your family or employees have cash to cover expenses, so they don’t have to sell assets quickly, when they might have to take low offers for them.
Business Succession Planning
You can use a life insurance policy to fund a buy-sell agreement and reclaim the shares of a co-owner when they pass away or depart your business. A partnership or family buy-sell agreement can help ensure a smooth transition of ownership between business partners or heirs.
Secure Financing
Life insurance can also help you get financing for your business. You can name the bank as a beneficiary on a life insurance policy so they know the loan will be paid back if you pass away.
Borrow or Withdraw Your Own Money
You can also withdraw or borrow money from the cash value of your life insurance policy if you need funds to expand your business or cover an emergency.
Get Advice on Your Life Insurance Options
Keep in mind that using the value of your life insurance policy when you’re alive will reduce the amount your beneficiaries receive after your death. So, you’ll want to weigh the pros and cons and make the choices that are right for your family.
Understanding all of your options when you’re figuring out what life insurance can be used for might be confusing or overwhelming. Farm Bureau agents can help you sort through your choices and explain them to you so you can make sense of it all. Reach out today to schedule a review and make sure you have the life insurance protection you need.