How To Prepare for Risks and Uncertainties with Life Insurance
You can prepare for life’s uncertainties and risks with life insurance. Additionally, life insurance offers multiple benefits to help address the various challenges we may face throughout our lifetime.
Death and Taxes
Ben Franklin said that death and taxes were the only certainties in life. And, while those things may be certain, it’s the uncertainty of when and how much that can cause problems.
Preparing for life’s uncertainties is imperative. Life insurance serves to provide financial protection for those who rely on your support in unforeseen circumstances.
Prepare with Term or Whole Life Insurance
Life insurance provides protection for your family and loved ones while allowing you to meet your financial goals. Whether term life or whole life, in the event of death, a death benefit is paid to the beneficiaries income tax-free.
Term life offers a death benefit to protect your family and business from financial loss. These policies can provide temporary protection at an affordable rate over a specified period of time.
Whole life insurance can offer comprehensive financial solutions well beyond the death benefit. Whole life offers guaranteed level premiums with permanent protection. Based on your goals, it can also coordinate with your other assets by providing protection, growth and significant tax benefits.
Real Risks in Life
Premature Death – According to a recent study by LIMRA, nearly half of Americans (41%) both insured and uninsured, say they don’t have sufficient life insurance coverage.
Life insurance can offer vital financial support to your loved ones when you pass away, even helping to replace lost income during your working years. Consider how your family would cover expenses if your income suddenly disappeared.
Becoming Disabled – In the Social Security Administration Fact Sheet for 2025, one in four 20-year-olds will become disabled before reaching age 67.
If you were unable to work due to injury or sickness, this could cause a serious strain on your finances. Most carriers today offer a Waiver of Premium Rider for their life insurance policies. This rider waives the premiums if you become totally disabled, ensuring that your plan continues.
With the waiver of premium rider, your policy’s death benefit and cash value continue to grow as intended, so you don’t have to worry about making premium payments.
Unexpected Care – The Society of Critical Care Medicine (SCCM) provides insights on the rising costs of medical care.
If at some point in your life you become critically, terminally or chronically ill, most whole life insurance policies offer options to help pay for these related expenses.
Though the rules and verbage may change from carrier to carrier on these contracts, Accelerated Benefit Riders allow you to accelerate your policy’s death benefit if you become terminally or chronically ill.
In addition, Long Term Care Riders may offer yet another alternative to help with long-term-care-related expenses, like nursing homes.
Not Being Prepared for Retirement – Numerous studies document that Americans are not prepared for retirement. Included in the National Financial Capability Study by FINRA, financial illiteracy has been cited as one reason Americans fail to plan. Only 42% of Americans are confident they know how much money they’ll need to live comfortably in retirement.
Just owning permanent life insurance when you retire allows you to optimize the distributions from your other assets, offering more spendable income more with improved tax efficiency.
When you own a whole life insurance policy from a mutual company, you can also utilize your policy’s cash value to supplement your income during retirement.
Cash values can be accessed through withdrawals or loans. These distributions can provide tax-free income via surrenders, up to the amount of the premiums you have paid in or the cost-basis. Loans can be considered tax-exempt after reacing the basis.
Serious Question to Ask So You Can Prepare
Do you have enough life insurance protection?
What do you want to happen in the event that you can no longer provide an income for your family?
If you need assistance with daily living activities, how will you pay those costs?
Will your current retirement plan be enough for you to live a similar lifestyle to what you have today?
Don’t Leave Your Life to Chance
If you’d like help in securing your financial future, maybe we can help. Learn how you can prepare and reduce your risks with a brief discovery meeting. We can meet at our offices, or online from the convenience of your home or office.
Until next time,
Barry Page
Barry Page is a licensed, independent insurance agent, Authorized Infinite Banking Practitioner, Managing General Agent, and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives using a unique approach to financial planning.
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