Uses for Life Insurance

Life insurance is really one dollar doing the work of many dollars


Life insurance does the job of providing the instant creation of cash at the time it is needed most. It is the only known way of generating a large cash fund at the specific but known time, when the insured dies. It provides the guarantee of large amounts of cash, insuring the availability of financial resources to protect people, business, charities and wealth.

The uses of life insurance can be broadly stated as common estate building and estate conservation needs that only life insurance can satisfy. Life insurance is the only known way to create instant cash for solving an assortment of personal and business problems. A small life insurance premium can generate large amounts of cash and guarantee that the cash be easily accessible or obtainable immediately after the insured dies.


What Type Of Life Insurance Do I Need

Wealth creation and wealth preservation

The common wealth building uses for life insurance are shifting wealth from one generation to another in the most cost effective manner possible. It is one of the most important wealth creation and wealth transfer plans available. It is particular valuable for families that have a majority of assets in real estate since the cash required to pay death taxes may not be available and force a fire sale at the worst possible time.


Business uses for life insurance   

Business owners can guarantee the sale of a business interest for a full and fair price using life insurance to fund a buy-sell agreement. For most small businesses, the lack of a buy-sell agreement using life insurance as the funding tool will mean a total lack of a market to sell a business when the owner or key employee dies. When this happens, the death of a business owner (or key employee) usually means the death of the business. Using life insurance in a business can insure the right parties receive the business interest and the right parties receive the cash.


Principal uses of life insurance

The most widely known uses for life insurance are for providing financial security to family members like a spouse, children and grandchildren. Continuing with the family dynamic, life insurance can be used for taking care of aging parents.  It can pay off debts such as mortgages and auto loans, benefit charities and provide for an education.


Life insurance uses for special needs

Life insurance can provide for the needs of a family member with certain gifts or handicaps. Special needs family members often require larger amounts of both capital and income. They usually have asset management needs that cannot be or would not be served with an outright transfer of property to them. Life insurance is often the only means of creating financial security to an individual with special needs.


Cash value life insurance in retirement

Life expectancy is increasing as we live longer lives into retirement. Expenses for health care can be expected to rise during retirement and many people are experiencing surprisingly higher standards of living. Inflation, lower benefits and taxes increase the volatility that you may have to deal with in retirement. Cash value life insurance is the obvious answers to part of these problems if the protection is coordinated with other strategic planning. 


Life insurance uses for when you live

A fairly new and increasingly popular life insurance use is to provide benefits if you don’t die but get stricken with a critical illness such as a heart attack, cancer, stroke, etc. These new life insurance policies can also provide benefits for chronic illness, meaning you are unable to perform two of the activities of daily living or you have a severe cognitive impairment that would require substantial supervision as defined by the policy.

A life insurance policy with living benefits still protects your family after you die but it may also give you valuable access to cash while you are alive and in desperate need of funds. This can be a smart way to have the funds you need without exhausting your retirement accounts, 401(k) or liquidating other assets.



Personal Uses

Life insurance is the only investment that guarantees the accumulation of cash at a specific, yet unknown time when the need for cash is most needed. The primary uses for personal life insurance needs are to,More..

Retirement Savings

Life insurance products have always played an important role in the preparation of economic security in retirement.

Business Uses

Cash accumulation for ongoing business needs, rewarding valuable employees and transferring a business to another or new owner are some of the business uses for life insurance.

Estate Planning

The value of life insurance can be known with certainty into the future, thus serving as a useful investment for creating and transferring wealth to your beneficiaries of choice.

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  • Make sure cash is available
  • Provide income
  • Pay debts
  • Create a large cash fund
  • Pay taxes
  • Run a business
  • Replace valuable employees
  • Hire and retain employees
  • Gifts to children or grandchildren
  • Gifts to charity
  • Gifts to persons of great importance in your life
  • Preserve the confidentiality of financial assurances to significant others