Have you considered buying life insurance but simply haven’t made it a priority? It’s understandable. Shopping for life insurance, particularly when you’re young and healthy, doesn’t seem all that important. But delaying coverage may not be the best idea.
Even among vibrant, active adults, tragedies can happen. Life insurance offers peace of mind to you and your loved ones of a financial safety net upon your passing.
Florida estate planning attorneys advise that life insurance is a valuable component of any comprehensive estate plan. Regardless of your age, social, or financial demographics, life insurance should be the cornerstone of your estate plan.
Let’s examine why you should keep your life insurance policies in-force.
7 Benefits of Life Insurance Policies in Florida
1. Peace of Mind
When you purchase a life insurance policy, you are buying peace of mind that your loved ones will have financial security when you die, particularly while they wait for the remainder of your estate to be settled.
Life insurance payouts are not subject to the lengthy probate process and generally become available to your beneficiaries rather quickly, helping with immediate expenses.
2. Tax-Free Death Benefit
Under the Internal Revenue Code, life insurance benefits are generally excluded from a policyholder’s taxable estate and pass to beneficiaries tax-free.
However, there are some exceptions to this rule, and you should consult a qualified Florida estate planning lawyer regarding protections.
3. Pay Off Debts
Your heirs can use life insurance benefits to pay off any outstanding debts after your death or replace other estate assets used toward debt elimination.
If you have unresolved debts, creditors can sue your estate for collection. Life insurance cash benefits can be used to pay debts prior to debt collection proceedings. If the debts are ordered to be paid from other assets, the life insurance benefit can replenish what was paid out.
4. Funeral and Burial Costs
Funeral and burial costs can easily run thousands of dollars. Some people plan and pre-pay these expenses, but many do not. Even a small life insurance benefit can alleviate the burden of these expenses from your heirs, especially during their time of grief and mourning.
5. Income Replacement
Whether your household was entirely or partially dependent on your wages, life insurance benefits provide a source of replacement income for your loved ones.
Life insurance benefits can also allow your loved ones to take needed time off work to recover and heal after your loss, without financial worry.
6. Wealth Replacement
People are living long and healthy lives well into their retirement years. Many fear that a long life and uncovered medical costs will deplete their resources, leaving little to pass along to their heirs.
Knowing that you have protected your family with life insurance benefits can provide a great sense of reassurance to you and your heirs.
7. Guaranteed Benefits
Unlike investments subject to market fluctuation, life insurance benefits generally are not. In most policies, as long as you maintain your premiums, avoid any lapses in coverage, and do not borrow excessively against your policy, your heirs can be guaranteed a protected benefit payment.
Contact a Florida Estate Planning Attorney Today
Life insurance can benefit nearly everyone, yet the type and amount of coverage needed will vary significantly between individuals. Each person’s unique situation influences policy selection and how the insurance proceeds will benefit their heirs.
Once you decide to purchase life insurance, or if you already have an existing policy, it’s critical you speak with an estate planning attorney right away. There are many protections and advantages of incorporating life insurance into your estate plan.
To learn more about how life insurance and estate planning work together in Florida, it’s wise to seek advice from someone knowledgeable about insurance and estate plans.
Contact our office today to speak with an experienced Florida estate planning attorney regarding your life insurance and estate planning needs.