If you have a life insurance policy, it’s probably so you can leave money to your named beneficiary. Serving Fredericksburg, VA, Pete Webb Agency urges people to get life insurance policies because of their value in estate planning.
Payout Is Quick
Life insurance is an excellent way to help your beneficiary pay your final expenses. Since there is no need to go to probate court, the proceeds from your life insurance policy are available to your named beneficiary shortly after your death. Another advantage is that unless you leave a hefty estate that exceeds the federal exemption or live where there is a state death tax, life insurance is not taxable.
Gains for You While You’re Alive
The benefits of life insurance can extend to you while you’re alive. If you have permanent life insurance, some policies allow you to borrow money on the policy or to make cash withdrawals based on the amount you’ve paid in. With this kind of policy, you may also be able to withdraw funds if you become disabled or need long-term care. This spares you—at least for a time—from having to tap into your personal assets or having your named beneficiary withdraw personal funds. Although loans on this kind of policy are usually tax-free, typically, you still have to pay interest on the loan to keep the policy from lapsing.
Survival of Your Business
If you’re a business owner, any kind of life insurance policy can keep your business `afloat as plans are made for new leadership. You may need to consult an attorney about this, but often the purchaser of the policy names the business as the beneficiary.
Contact Pete Webb Agency, which serves Fredericksburg, VA, to discuss the benefits of life insurance in estate planning.