Benefits of Life Insurance
The purpose of life insurance is pretty simple: in the event of your death, life insurance will provide coverage for your family and loved ones to ensure their financial security. However, life insurance benefits vary by policy type and each life insurance plan offers its own set of advantages for the policy holder.
What Are the Benefits of Life Insurance Products?
Life insurance policies can assist your family in paying for funeral expenses, outstanding debt or medical bills, mortgages, and more in the event of your death. They can also serve as an income replacement for your family, which is especially helpful if you provide the main source of income in your family.
Plus, life insurance with living benefits, which we will explore further below, can help you take advantage of your policy while you're still living.
Different life insurance plans offer different features and benefits. Each will differ in terms of how long the policy lasts, the amount of coverage included, and how much they cost. Here, we break down the specific benefits of each of AIG Direct’s Life Insurance products:
What Are the Benefits of Term Life Insurance?
Term Life Insurance is a popular product due to its flexibility regarding term lengths and affordable costs. The benefits of Term Life Insurance include:
- Affordable, cost-effective rates.
- Flexible term lengths that can be customized based both on your family’s needs and budget.
- The option of converting to a Whole Life insurance policy.
What Are the Benefits of Quality of Life Insurance?
Quality of Life Insurance provides coverage that you can use throughout your lifetime. The benefits of Quality of Life Insurance include:
- Flexible and affordable term rates — Quality of Life Insurance policies are not only affordable since they cover multiple needs, but they can also be adjusted to accommodate certain events in your life and allow you to access the cash benefit of your policy.
- Living benefits that can cover those who have a qualifying chronic, critical, or terminal illness. For more information, click here.
- Coverage for medical bills and expenses.
What Are the Benefits of Whole Life Insurance?
Whole Life Insurance has no coverage expiration date — it lasts your entire life. You simply buy the policy coverage and keep paying the same premium rate during your working and retirement years. The benefits of Whole Life Insurance include:
- Adjustable coverage that can be changed as your needs change.
- Locked-in rates that will not change as you age.
- A Cash Value benefit that allows you to set money aside each time you make a payment. The funds can grow tax-free and be borrowed however you like.
What Are the Benefits of Universal Life Insurance?
Universal Life Insurance is a type of permanent life insurance that typically offers more flexibility than other permanent life insurance; depending on your policy, you may be able to adjust your premiums and death benefit amount. The benefits of Universal Life Insurance include:
- Death benefit that grows over time
- Lifelong Coverage
- A Cash Value benefit that allows you to set money aside each time you make a payment. The funds can grow tax-free and be borrowed however you like.*
What Are the Benefits of Guaranteed Issue Whole Life Insurance?
Guaranteed Issue Whole Life Insurance is a type of Whole Life Insurance specifically designed for people between 50 and 80 years of age. The benefits of Guaranteed Issue Whole Life Insurance include:
- Guaranteed acceptance senior life insurance.
- No medical exam required, making it a great option for those who may be turned down for other policies due to health-related issues.
- Living benefits that are included and go into effect if you have a chronic, critical, or terminal illness. For more information, click here.
How to Get the Most Financial Value out of Your Life Insurance Plan
There are also some unexpected benefits of life insurance where your life insurance policy can cover scenarios and purposes you might not have considered. Here are a few unexpected benefits of life insurance:
If your partner is now solely responsible for your children, your life insurance policy could help them pay for daycare or another childcare service while they return to work.
The death benefit from your life insurance policy could also be used towards your children's college tuition fees, reducing the need for them to take out loans and get into debt.
Credit Card Debt
With the right amount of coverage, your death benefit could also be used towards unpaid credit card debt after your death, relieving your family of substantial financial burden.
Supplemental Retirement Fund
If you're the main contributor to your retirement fund, with the right amount of coverage, your death benefit can also be used to create contributions to your partner's retirement fund.
To get the most benefits out of your life insurance policy, you can also add life insurance riders for additional coverage. Life insurance riders, such as an accidental death rider benefit, or a child rider, are cost-efficient ways to get extra coverage without the need to complete further exams or applications.
Making sure your loved ones are protected after you're gone is top of mind for everyone. You can get started by contacting us directly by calling 800-294-4544 to help you find the best policy for your needs.
* Based on current federal income tax law. Assumes the use of withdrawals to basis and/or policy loans. If the policy is classified as a modified endowment contract (see IRC section 7702A), withdrawals or loans are subject to regular income tax and an additional 10% tax penalty may apply if taken prior to age 59 ½.