Using whole life insurance for legacy planning
As we get older, we start thinking more about what we will leave behind for our loved ones. This is what legacy planning is all about. It means making sure your family is taken care of when you're gone. One way to do this is by using whole life insurance.
Whole life insurance, also known as permanent life insurance, is a type of coverage that stays with you for life. It helps you build a lasting gift for your children, grandchildren, or even a favorite charity. Many adults over 50 choose whole life insurance for legacy planning because it can help provide added peace of mind and benefits for loved ones.
How does whole life insurance work?
Unlike term life insurance, which lasts only for a set number of years, whole life insurance lasts your entire life. That’s a key difference between term and whole life insurance. Term insurance may run out before you pass away. But whole life insurance is always there, no matter when that time comes.
When you pay into whole life insurance, you get two things: a death benefit that goes to your beneficiaries (or causes) when you pass, and a cash value that grows over time that can be used while you're still alive. This cash value grows slowly, but it’s guaranteed. Some people use it to borrow money in retirement. (It's important to know that such loans accrue interest, and unpaid loans and interest decrease the death benefit.) Others just let the cash value grow to increase their legacy.
Benefits of whole life insurance
There are many benefits of whole life insurance when you’re thinking about legacy planning. Some typically include:
- Benefit payment: The death benefit is paid to your beneficiaries and is typically not subject to U.S. federal income tax.
- Lifelong coverage: You don’t have to worry about the insurance ending in your lifetime.
- Cash value: It grows over time and gives you more options.
- Fixed premiums: Your monthly cost won’t go up, even as you age.
Whole life insurance for older adults
Many people wonder, "Is whole life insurance for seniors a good idea?" The answer depends on your needs. If your goal is to leave behind money for your family to help cover final expenses, it might be the right choice for you. Now may be a good time to get insurance because the sooner you start, the lower your cost may be. But even in later years, it's worth looking into your options.
Planning your legacy with confidence
Legacy planning is about more than money. It can show your family that you cared, by planning ahead. Whole life coverage lets you leave a meaningful gift that lasts long after you’re gone. Whether you're thinking about covering your final expenses or leaving a nest egg, whole life insurance for older adults may be worth considering. It can bring you comfort and help give your loved ones the support they might need.
Planning for tomorrow starts today. With whole life insurance, you can leave behind something that truly matters.
This article is provided by New York Life Insurance Company for informational purposes only. This article is not intended to provide tax, legal, financial or accounting advice. Please consult your own professional for advice specific to your circumstances.
