The Aspects of the Life Insurance Plan for the Elderly

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Life insurance coverage is a contract between the insurance agency and the insurance policyholder, wherein the company promises to pay the beneficiary a designated amount of cash after the death of the policyholder.

Depending with the agreement, some other events such as crucial illnesses or terminal illnesses have the ability of triggering payment. The policyholder usually pays premiums regularly or in the form of a lump sum. Many expenses just like memorial service expenses, college fees, mortgage, etc. are featured in the benefits. Some great benefits of the life insurance for the elderly include:

Protects the well being of the survivors

The right cover helps to fulfill many needs. One of the most important needs is its capability to protect the financial wellbeing of the survivors by maintaining their lifestyle upon the untimely death of the breadwinner. The policy provides a tax-free benefit upon the death of the policyholder.

The lump-sum death benefit can be invested to earn an income for the spouse and/or dependent children. Part of the benefits can be used to settle mortgage or even debts by eliminating the need of the survivor(s) continuing to support the repayment schedules.

Provides for loans without affecting benefits of the policy

The policyholders have a chance of taking up a loan against the insurance plan. This goes a long way in assisting the policyholder to cater for the unplanned life stages without affecting benefits of the cover that they have obtained.

Mortgage redemption

Insurance is the best tool that helps to cover loans and mortgage taken by the policyholder. Thereby, in the instance of unexpected circumstances, the obligation of repaying the loan or mortgage is not borne by the bereaved family.

Tax benefits

Death typically makes income tax liabilities over the deceased's estate. For instance, the capital property is usually dealt with as if the property was sold for its fair market value, unless it is transferred to a spouse.

Therefore, this attracts taxation on the capital gains particularly when the asset has appreciated in value. This burden of taxation can result in liquidity problems for the estate, particularly if the children want to hold the assets. The ideal cover provides attractive tax benefits at the point of entry as well as exit of the plan.

Exempt from seizure by creditors

When a spouse or children is designated as the named beneficiary of the proceeds of the insurance, the plan is exempted from seizure by any creditor of the policyholder.

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