Having a life insurance policy is a must for anyone with a family reliant upon their income. If you were to die without a life policy to protect your family, they could very easily find themselves in an insurmountable financial crisis.
A life insurance policy works to ensure that your family’s financial needs, from everyday living expenses to the future college tuition of a child, will be covered should you pass away.
A life insurance policy’s death benefit can be tax-free and far exceed the premiums you’ve paid every year for the policy — that is if it’s set up correctly. On the flipside, the death benefit could be taxed so severely that your loved ones would only receive a fraction of it if you don’t ensure that ownership and beneficiary designations are properly set up.
To avoid that scenario, keep these tax elements in mind when you’re structuring your life insurance policy: Don’t Let Taxes Cut into Your Heir’s Life Insurance Benefits