Permanent life insurance can be a useful way to ensure that your family members or dependents are financially provided for when you pass away. Permanent life insurance policies, like whole life insurance and universal life insurance, never expire as long as you pay the required premiums, and come with a guaranteed death benefit. Here are some ways to leave a guaranteed death benefit.
Leave it to your children
Many people choose permanent life insurance as a way to leave a legacy for their adult children. If you have more than one child, you can name multiple beneficiaries and state what percentage of the death benefit each one will receive. The death benefit can be a way for adult children to manage the cost of the policyholder’s funeral, but it can have many other benefits as well. Your life insurance payout could become a nest egg for your kids, a down payment on a house, or generally help them reach their financial goals.
Support your spouse
In single-income families, life insurance often protects the stay-at-home spouse. If the policyholder passes away suddenly, the death benefit ensures that the surviving spouse has access to funds that can replace lost income. Some stay-at-home parents also get insurance so that, in the event of their passing, the insurance payout can be used to hire someone to take care of the important tasks they managed.
Provide for dependents
You may have an adult child or other family member who depends on you for financial support. Naming a dependent as your beneficiary is a way for you to provide for them after you’re gone. The death benefit from your policy can ensure that they have access to funds even after your passing, so they can make suitable long-term financial arrangements.
Create a brighter future for your grandkids
Policyholders whose adult children are doing well financially may want to leave their death benefit to their grandchildren. This payout can go into a college fund or an emergency fund for your grandkids when they come of age. If your grandchildren are currently minors, insurance companies cannot release a death benefit payout directly to them. In this case, you may want to consider your options, including creating a trust.
Donate to charity
Not everyone knows that you can name a nonprofit organization as your beneficiary. This allows the organization to receive the payout from your life insurance policy when you pass. People with existing permanent life insurance policies sometimes change their beneficiaries to reflect their charity of choice when their own family members no longer need the insurance payout.
Remember that you can have more than one beneficiary to your policy. If you want to leave part of the payout to a family member and the rest to a charitable organization, you only need to get in touch with your insurance provider and have your beneficiary details updated.