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Brent Lee of TruWealth Financial talks about a broad overview of life insurance, its types and uses. He reviews the basics of what life insurance is and how it benefits you while you're alive, and your loved ones after you pass.
Traditional Uses of Life Insurance
At TruWealth Financial we believe life insurance is an essential part of a financial plan. It provides a cash death benefit upon the passing of the insured person. For younger families, this is to provide income replacement, pay off debt, fund retirement or college savings plans for the remaining family members. As we progress through life, life insurance policies are often used to equalize inheritances or pay estate taxes. For these types of uses, it's critical to have the correct amount of death benefit, followed by the most cost-efficient policy structure.
Tactical Uses of Life Insurance
While Life Insurance at its core is a contract with an insurance company that pays a death benefit at the insured's death, there are many more ways certain policy types are utilized in high net-worth situations. When structured properly, certain cash value policy structures are excellent ways to build and grow tax-advantaged wealth. This cash value can provide tax-free income streams, assets to pay for long-term care expenses, or if not used during your lifetime as tax-free benefit to your heirs.