Four Ways You Can Use Life Insurance as Part of Your Financial Plan

financial plan

Your overall financial plan, retirement plan and estate plan can benefit from a comprehensive evaluation of your individual goals. Furthermore, many of these aspects work together or may influence one another at some point in the future.

Understanding your overall need for a life insurance policy and ensuring that you have proper coverage gives you peace of mind and helps you to plan for unexpected events.

Many people do not have life insurance or do not have the appropriate amount of life insurance. It’s a good idea to start with understanding some of the things you can achieve, and the advantages associated with a life insurance policy. These include:

  • You can get peace of mind that whoever you care about will be financially taken care of in a relatively quick manner should something happen to you. This is unlike assets that may be passed through probate, which can be time consuming and expensive.
  • You can use certain life insurance policies to perceive tax-free income in retirement.
  • If you are concerned about creditor protection and impact of taxes, some life insurance policies provide tax-advantaged savings, although this typically does not apply to term life insurance.

You can protect your legacy by ensuring that a substantial portion of your gifts in your estate go to those you care about rather than being applied in taxes for your overall probate estate.

It is important to understand the impact of life insurance and to ensure that you have the right coverage and the right types of policies as well as updated beneficiaries. Talk to an estate planning lawyer today to learn more about this process. Our Pasadena estate planners regularly work with people who have a multi-pronged approach to their retirement, financial, and estate plans.

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