Life cover is useful to ensure the financial stability of your family in case you are unable to earn due to an accident or illness. The policy also pays the benefits to your beneficiaries in case of an untoward event. Procuring such coverage ensures that your family can to meet their expenses and sustain their lifestyles even in your absence.

One of the things to know about life insurance is that while it is not necessary, purchasing a policy is a smart investment decision. This is especially if you have dependents such as spouse, parents, and children. The life plan will provide financial security to your family if you are not around. Moreover, life policies offer several benefits and are a flexible instrument. Some of these include the flexibility of adding riders for greater coverage or withdrawing part of the accumulated corpus to meet expenses such as children’s education or wedding.

The insurance cost depends on the type of policy chosen. In addition, factors like the sum assured, premium amount, age, and coverage influence the insurance cost. The total insurance costs include mortality charges, administrative charges, and investment fees. To know all about life insurance costs, you must read the policy document.

Death benefits are generally received income tax-free by your beneficiaries. In the case of permanent life insurance policies, cash values accumulate on an income tax-deferred basis. That means you would not have to pay income tax on any of the policy’s earnings as long as the policy remains in effect. In addition, most policy loans and withdrawals are not taxable (although withdrawals and loans will reduce the cash value and death benefit).

One way to calculate the amount of life insurance needed is to multiply your annual salary by the numbers of years left until retirement. For example if a 40 year old currently makes $20,000 a year they will need $500,000 (25 years x $20,000) in life insurance.

Start planning for retirement as soon as you can to take advantage of the power of compounding. Younger investors can take more risk with their investments while investors closer to retirement should be more conservative.

It’s never too early to start thinking about a college savings plan. Whether your child is a teenager or toddler, the best time to start a college fund is now. Making the right plan for your children’s future starts with understanding all of your investment options.

One way to access all your cash value and avoid taxes is to withdraw the amount as a collateral loan

Yes, life insurance is an asset if it accumulate cash value. So what is cash value? When you purchase a permanent life insurance policy, part of your premium may be deposited into a tax-deferred savings vehicle.

You’ll want to consider several factors when calculating how much life insurance you need. These include your age, overall health, life expectancy, your income, your debts and your assets. If you’ve already built a sizeable nest egg and you don’t have much debt you may not need as much coverage.