If you’re thinking of purchasing a life insurance policy, you most likely want the best terms possible. To help get the most out of your life insurance, we’ve rounded up tips to follow. Remember that maximizing your life insurance’s value begins with choosing the best life insurance policy for your lifestyle.
1. Consult a Professional
To get the most out of your life insurance plan, you’ll need to speak with a financial advisor who can consult you. A financial advisor can help you design your life insurance plan to fit your financial goals rather than being a disconnected benefit.
For the best financial health, it’s important to make all financial decisions work in conjunction with one another. While you may be able to work out those details on your own, the best results will come from working with someone who knows the ins and outs of financial planning, including tax benefits, laws and regulations, and your wants and needs.
Getting the most out of your life insurance plan means starting with the best policy possible!
2. Revisit Your Plan Often
A life insurance plan is not nearly as effective when it is outdated and not up to terms with your needs. If you’ve added new dependents or acquired more assets that need to be covered in the event of your absence, it’s important to reflect those changes in your life insurance policy.
Not having enough coverage for your loved one’s needs or having the wrong beneficiaries listed can render your plan ineffective. Make sure to revisit your plan annually at a minimum, and every time there is a major life plan to ensure total protection in all scenarios.
3. Take Advantage of Living Benefits
Some life insurance policies offer a living benefit that you might take advantage of to maximize your plan all around. The way living benefits work is that you can borrow a portion of your death benefit (the payout amount to be dispersed upon your death) to use while still alive.
Typically, customers borrow from their death benefit to help pay for severe illnesses up to a 50% amount. For example, if your benefit amount is $50,000, you may be able to borrow up to $25,000 while still living. Upon your death, the remaining $25,000 would be paid to your beneficiaries.
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4. Use the Cash Value
When you opt for a whole life insurance policy, one of the benefits to take advantage of when in need is the policy’s cash value. This benefit is part of what makes the whole policy more expensive than a term policy, but it can be a great benefit if you can afford it.
When your money sits with a life insurance company as part of a whole policy, the funds grow over time, and you create equity that can usually be borrowed against in the form of a loan or total withdrawal. In a time of need, this can offer major relief but beware of high-interest fees and strict repayment terms in the case of borrowing.
The Bottom Line
Choosing a life insurance policy can be stressful, especially when you’re looking to get the most out of it. Start on the right foot by shopping for plans that fit your needs and consulting a professional if necessary. From there, look for benefits that match your potential needs, including living benefits and the potential to take advantage of cash value.