RURAL MUTUAL

6 Ways Life Insurance Can Protect You and Your Family

Purchasing life insurance is a smart financial decision, but it is an emotional one. It is a tough topic to think about, but you know it is important to take steps now to ensure your family's financial future is protected should the unexpected happen. The most common types are permanent and term life insurance.

Permanent policies typically have two components: cash value accumulation and death benefit. A permanent policy is designed to be kept for a lifetime. With permanent life insurance, you may pay slightly higher premiums compared to a term policy, but you are earning cash value with your premium dollars and you have coverage for life.

A term life insurance policy provides a predetermined sum (also called a death benefit) if you, as the insured, die during a specified period. Because term insurance is designed to be kept for a shorter amount of time it is one of the most affordable life insurance options. However, unlike permanent policies, there is no cash value, but you may have the option to convert your term policy to a permanent policy in the future.

So, how can coverage help protect you and your family? Life insurance can help:

Provide financial well-being

If your family relies on your income to pay for necessities like monthly bills and day-to-day expenses, life insurance can help replace the loss of your income. The death benefit also can be used to pay off debts like a mortgage, car loans and credit cards – removing some financial stress. If you have kids, it gives your loved ones more flexibility to stay home or spend more time with them.

Pay for a child's college

Your policy's death benefit can be used for many things including paying for a child's college education. Additionally, with a policy that accumulates a cash value such as permanent life insurance, you can generally access the cash value through a policy loan or withdrawal while you are still living.

Keep the business in the family

If you own a business like a farm, planning includes developing and updating your succession plan to help ensure your legacy passes successfully to the next generation. Certain taxes may apply when passing a family business to the next generation. Life insurance can help cover those costs, easing the tax burden on the future business or farm owner and other family members.

Leave a charitable legacy

Do you have a favorite charity? Life insurance can be a great tool for increasing charitable giving in your community. You can make a larger gift than might otherwise be possible by designating your go-to charity as a beneficiary on your life insurance policy.

Supplement retirement income

If you purchase permanent life insurance, you will generally have access to your policy's cash value through a policy loan or withdrawal for emergencies, retirement income and more. Some types of life insurance, such as permanent life insurance, build cash value over time that can be used as a form of supplemental income in retirement. You have the flexibility to access your accumulated cash without the restrictions that other investments may carry.

Support your needs

There is a common misconception that life insurance is only useful after a person has died. But some policies have optional benefits that can help pay for chronic or terminal illness care expenses.

A daily living rider can be an advantage when dealing with a scenario such as a chronic illness. If you become unable to perform necessary daily activities such as dressing or bathing, with the rider you can have accelerated access to your policy's death benefit with the remainder going to your beneficiary when you pass away. While this rider can help protect you financially in your later years, it is not a substitute for long-term care or disability income insurance. Generally, the rider would need to be purchased at policy issue. Life insurance is an important element of your overall financial well-being. Expenses for your family can add up quickly from paying for a funeral, staying on top of the mortgage payment and keeping up with the daily cost of living. With life insurance, you gain peace of mind knowing your family will be protected.

With so many options available, choosing the right insurance policy can be confusing. As you examine your options, be sure to consult with a trusted Rural Mutual agent or visit ruralmutual. com/find-an-agent.

Neither the company nor its agents give tax, accounting or legal advice. Please consult your professional advisors in these areas. Farm Bureau Life Insurance Company/West Des Moines, IA. Rural Mutual Insurance Company/Madison, WI.