Useless is life insurance when you don’t have significant debts? Not necessarily! Several reasons may apply, depending on your situation.
1- Insure yourself to leave an inheritance to your loved ones
Life insurance benefits are tax-free. Beneficiaries are therefore entitled to the full amount of insurance, without affecting their tax rate. The amount of term life insurance, for example, can also supplement an inheritance, in particular by offsetting the inheritance tax payable on a property.
Roughly speaking, we can remember that the revocable beneficiary can be modified at any time and without notice by the owner of the life insurance contract while the irrevocable beneficiary remains so until he agrees to no longer be so, and this, in writing. Of course there are exceptions.
2- Take out insurance to guarantee the financial future of your loved ones
This is THE classic reason to take out life insurance because a death often causes a reduction in family income. Furthermore, as a good father or mother, many also want to give a helping hand to their descendants. Others, for example, to be fair, will bequeath the chalet or residence to one and compensate the other by making them the beneficiary of the insurance. Life insurance can also be used:
To pay debts: mortgage (if the property is not protected by mortgage insurance ), car loan, credit cards, etc.
To pay funeral expenses: if these expenses are generally paid from the estate, it is possible that the amount is insufficient.
Who will care for your pet after you die? We don’t always think about it, but pets are often a very good reason to take out life insurance. Name a trusted person as beneficiary: they will have the necessary amounts to pay the expenses and will thus be able to continue to take good care of your treasure. Whether you own a cat, dog, parrot or horse, consider this option.
3- Make sure to make a planned donation upon death
Charitable life insurance donations are a reliable way to ensure that the chosen organization (e.g.: Centraide, Laval University, etc.) actually receives the amounts desired by the insured, without dispute. possible of possible heirs. The organization designated as beneficiary will receive the money directly. The insured person benefits from more than one tax relief for their current tax return or for the final tax return. Would you like to move forward with this option? Find out more from the chosen organization!
4- Save with your life insurance
Some life insurance policies combine an insurance portion with a savings portion. The surpluses thus accumulated end up in a capitalization fund, sheltered from tax, until the amounts are withdrawn. Withdrawal is possible under certain conditions. Many insurance policies even offer better rates of return than products such as guaranteed investment certificates or savings bonds.
5- Take out insurance to protect shareholders or guarantee the longevity of a company
People who own businesses have an added responsibility in that their departure will affect more people directly. An owner’s life insurance can be used to protect the interests of his family, partners and employees, or to provide liquidity. Life insurance can also be used to repurchase the shares of the deceased shareholder so that business can continue.
While there are several reasons to take out life insurance, there are also a multitude of products available. Take the time to compare offers from different companies and ideally consider all of your assets to make an informed choice and, if possible, save money . Also note that it is generally more advantageous to take out life insurance sooner rather than later .
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