Year-End Financial Review: Life Insurance Benefits
November 7, 2024
The end of the year is often filled with “things to do,” including holiday events and gatherings, and there is a lot of focus on resolutions for the next year. Before you get to those tasks, now is the ideal time to do an end-of-the-year financial review. It’s one of the best ways to ensure you’re creating a strong, financially viable year to come. Don’t overlook the importance of incorporating life insurance into this plan. Before the new year, make sure you have the right type and amount of life insurance in place to support your financial planning objectives.
Assess Your Current Life Insurance Coverage
Begin by evaluating your existing life insurance policy to ensure it aligns with your future financial needs. Ask yourself: Does your coverage adequately protect against outstanding debts and provide for your family’s lifestyle if the unexpected happens?
This is an ideal time to review your financial protection as a whole. Consider any significant life events, such as the following, and adjust your policies to reflect new financial responsibilities and priorities.
Marriage or Divorce
After getting married, you may want to increase your coverage to support a shared household and ensure your spouse has financial security in your absence. Conversely, after a divorce, you might want to update your beneficiary designations or modify coverage to better suit your individual circumstances.
New Child
With the addition of a child, consider increasing your policy’s coverage to account for future expenses, such as education costs or childcare. This adjustment helps support your child’s financial needs as they grow.
New Home
A new mortgage brings a long-term financial commitment. Increasing your insurance coverage to cover the outstanding balance of your mortgage can provide peace of mind, ensuring that your loved ones won’t have to worry about housing costs if something happens to you.
Career Changes or New Debt
If you’ve taken on new debt or received a significant promotion, your income and expenses may have changed. Adjusting your policy’s coverage to reflect these shifts can help maintain your family’s standard of living and ensure they’re protected.
Working with a financial advisor is essential, as they can help you assess how these life events impact your financial goals and recommend adjustments to ensure your policy continues to meet you and your family’s evolving needs.
Tax Benefits of Life Insurance
Now is also a great time to consider the tax advantages that life insurance can offer. Life insurance provides tax-free death benefits to your heirs, allowing them to receive the full amount without a tax burden.
Additionally, the policy’s cash value grows on a tax-deferred basis, building over time without immediate tax implications. Depending on your policy type, you may even have access to this cash value during your lifetime.
It’s worth exploring other tax-efficient options, such as Roth annuities, to further diversify your financial strategy.
Benefits of Life Insurance Beyond Death Benefits
Life insurance offers more than just support for loved ones after you’re gone; it can be a valuable financial tool during your lifetime.
Some policies allow you to borrow from the accumulated cash value through low-interest loans, giving you access to funds when you need them most, such as during emergencies. This flexibility can provide an invaluable safety net.
Life insurance can also support your long-term financial goals. Many policies can be integrated into retirement planning or serve as part of your estate strategy, helping you build a comprehensive plan for the future.
Setting Financial Goals for the New Year
As you look ahead to the new year, it’s a perfect time to set financial goals that provide lasting security and peace of mind for yourself and those you care about most. Life insurance can be a cornerstone of these plans, offering protection and stability that align with your hopes for the future.
When you meet with your financial advisor, consider ways to integrate life insurance into your broader financial goals, ensuring it becomes a core component of your financial wellness rather than an afterthought. Setting realistic and meaningful goals for purchasing or building life insurance protection can empower you to make decisions that truly safeguard your family and their future.
A trusted advisor can guide you in tailoring your life insurance to meet unique financial aspirations, whether it’s contributing to a charity close to your heart or creating a secure foundation for your family’s dreams. This year, make life insurance a part of the legacy you’re building, one that will support your loved ones and reflect the values you cherish long after today.
Begin 2025 With Confidence
Take the first step toward securing your family’s future by scheduling a meeting with your financial advisor to review your life insurance needs and goals. There’s no better time than now to ensure you’re prepared for the year ahead.
At 1891 Financial Life, we’re committed to providing personalized insurance solutions that protect what matters most to you. Our team is here to guide you with expertise, care, and a genuine understanding of your unique needs. Contact us today to explore your options and create a financial plan that brings you lasting peace of mind.
About 1891 Financial Life
Our culture is about looking out — for you, for others, for family, for the community. That is how we go “Beyond Life Insurance.”
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. In 2023, 1891 Financial Life was listed by Forbes as one of "The World's Best Life Insurance Companies."
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.