3 Important Ways Life Insurance Can Be a Lifeline

Life insurance is essential for more than just money because it provides emotional reassurance, preserves a legacy, and allows for strategic financial planning. 

While it is a vital aspect of the financial planning process, it is sometimes disregarded. According to the Life Insurance Marketing Research Association (LIMRA), at least 106 million Americans, or 41%, do not believe they have adequate life insurance coverage.

Without life insurance, you risk leaving financial commitments to your successors. While there is no one-size-fits-all solution, the following are three ways that life insurance can help:

1. Maximizing monetary value.
A life insurance policy is a strategic financial tool that provides tax breaks and investment opportunities. Depending on the type of policy chosen, consumers can use life insurance to build up cash value over time. 

This cash value component allows policyholders to access assets for various purposes, including boosting retirement income, meeting unforeseen bills, or pursuing lifelong goals. However, it is crucial to know that withdrawing funds from your policy diminishes your heirs' death benefit if it is not repaid.

2. Establishing a lasting legacy.
Life insurance can create a legacy in a variety of ways, including guaranteeing decent education for children and leaving an inheritance to support future generations.

3. Establishing a cash reserve and offering emotional security.
By setting aside a predetermined sum of money, life insurance helps ensure that dependents are not confronted with overwhelming financial issues when a loved one dies. Without this safety net, families may face financial difficulties, compromising their future and well-being.