The Uses of Life Insurance for the Elderly

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Current revision as of 02:30, 17 December 2015

The main reason of taking up insurance is to help protect the dependents after the death of the breadwinner. However, insurance can be used as an important investment vehicle. Therefore, you can consider buying insurance to financially protect loved ones in case you pass away. Your dependents will be able to receive a cash lump sum that can be used for supporting the family during a trying moment. Other uses of life insurance include:

  • Use insurance for the retirement savings

It is common to find people taking out an insurance cover on their parents. Therefore, when their parents pass away, they will be in a position to access funds that can get them through their retirement- hence it is important to find the right policy. If you are in your 30's and your parents are above 50 years, you can consider taking up a policy for them. For the best deals, compare over-50 life insurance quotes from leading companies. Because of medical advancements, you can expect your parents to live longer. Therefore, you will be in a position to get the benefits when you are close to retirement.

  • Use insurance for withdrawing cash

Some of the policies accumulate cash over the years. A good example is the whole life policy. To generate more attractive benefits, you can consider increasing the amounts you pay in the form of premiums, as you grow older. Therefore, the difference between what is paid out every month and the amount that you should pay generates a cash balance- you can easily withdraw from these balance. However, the cash needs to be paid back to avoid the amount plus interest to be deducted from the insurance payout.

  • Use insurance to cater for the debts

One important feature of insurance is that it is not taxed. Therefore, when the policyholder passes away, the beneficiaries receive the payout and the government will not seek them out for a cut. Furthermore, every estate has debts and taxes to pay and hence most of the people opt to use the payout from their insurance to cover these costs. To make sure that the children and surviving spouse are not left with the responsibility of sorting out the estate bills, it is important to apply for the right policy. Moreover, if you have a 30-year mortgage, you can consider purchasing a 30-year term policy. This will ensure the mortgage is adequately covered when you are no longer present to service it.

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