In Episode 239 of THE Amicable Divorce Expert podcast, you learned the following:
Life insurance can protect your child and spousal support payments in the event that the payor dies or becomes unable to work. A Term Life Insurance policy is written on the life of a person, and is collected if that person dies before the term of the policy ends. Many people insist on a Term policy when there are minor children, as well as spousal support/alimony payments due in order to have the security that their children or themselves will be protected financially in the event that the payor passes. Not enough discussion takes place around this topic, but it should. Many people live in uncertainty about receiving child and spousal support because this option isn’t discussed. Those who know about the value of a Term policy put effort into having one.
Life insurance is tax free money. This makes life insurance a valuable asset for long range income when people are past retirement age. Life insurance used to be one of the most sought after ways to invest money with a tax-free return, but as time went on there became so many other options that life insurance got lost in the financial shuffle. But I hear more and more people discussing the value of life insurance lately. I believe my father paid for my and my sister’s college with life insurance. This is a great idea to help fund your children’s education.
The difference between the 529 Plan vs Life Insurance for the children’s colleges is night and day. A 529 Plan must be used solely for education expenses or else the gains will be subject to ordinary income tax. Life insurance funds are available tax-free for any purpose at any time, as long as they are taken out using participating policy loans.
LifeHappens.org explains the differences in all types of insurance, to include Disability Insurance, Long-Term Care Insurance, Life and Term Insurance
There are lots of different ways to use insurance, and speaking to a good insurance agent is a great education, and maybe a little safer than other investments. It’s worth checking out, especially if you want to protect your revenue streams for child and spousal support. There is no guarantee that the payor will be around to finish the commitments.
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