| Life insurance offers tax-free capital guarantees |
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In this case, the guaranteed tax-free $500,000 could provide necessities such as groceries, shelter, home repairs, means of transportation, and education for dependents. In this sense, the value of life insurance is tangible. Contrasted against the assets and services such a large death benefit can purchase, we realize how small the premium cost really is. Even if death occurs one day after the initial premium payment, the full benefit is payable tax-free, thus instantly creating new capital, sometimes far exceeding the insured individual's net worth. Most accountants and financial advisors agree that life insurance is the foundation upon which families with dependents should build their financial security. Life insurance, in addition to savings, is designed to provide the capital necessary to create ongoing investment income for dependents after income taxes and other liabilities are paid. Many people who are not in perfect health are surprised to find that they can also purchase life insurance to ensure their financial security. Note: Life insurance premiums vary according to the policy type, and in some cases, paying a little more premium offers enhanced benefits and some offer tax-deferral strategies.
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Life insurance has provided families with basic financial security for well over 100 years. For example, a healthy, non-smoking 40-year-old male can purchase up to $ 500,000 worth of insurance for as little as $ 50 per month. That life insurance policy would pay out a tax-free death benefit equivalent to 10,000 times the amount of one monthly premium payment.