Life insurance and bank products serve different purposes and offer different benefits. Below are some of the key benefits of life insurance over bank products
Protection: The primary benefit of life insurance is protection. Life insurance provides financial protection to your loved ones in the event of your unexpected death. The death benefit can be used to pay off debts, cover living expenses, or provide an inheritance to your beneficiaries. Bank products such as savings accounts or certificates of deposit (CDs) do not provide this level of protection.
Tax-free benefits: The death benefit paid out by life insurance policies is generally tax-free, which means your beneficiaries receive the full amount. On the other hand, bank products are subject to income tax, which reduces the amount of interest earned.
Estate planning: Life insurance can be used as part of your estate planning. You can name your beneficiaries and specify how the death benefit should be used. This can be particularly useful if you have complex family situations or significant assets to protect. Bank products do not offer this level of flexibility.
Cash value: Some types of life insurance policies, such as whole life insurance, offer a cash value component that grows over time. This can be used as a source of savings or as collateral for a loan. Bank products, such as savings accounts or CDs, do not offer this type of cash value.
Guaranteed benefits: Life insurance policies provide guaranteed benefits, such as a death benefit or a cash value component. Bank products, on the other hand, are subject to market fluctuations and may not provide guaranteed returns.
In summary, while bank products can be a useful tool for saving and investing, life insurance offers unique benefits in terms of protection, tax-free benefits, estate planning, cash value, and guaranteed benefits. It’s important to carefully consider your financial goals and needs when deciding which product is right for you.
As always, if you ever have a question about this or any of the topics that I have shared, do not hesitate to click the link below to schedule a personal one-on-one strategy session with me. Schedule time with Vince .
“Always Be Outstanding and let’s make yesterday jealous of today.”
Vincent A. Virga
Advisory services offered through Madison Avenue Securities LLC (MAS), a Registered Investment Advisor; MAS and PFS Wealth Management Group are not affiliated companies. MAS does not provide legal and tax advice. Seek competent legal and tax counsel for your specific needs. All guarantees are subject to the claims paying ability of the insurance company. Life insurance products are not FDIC insured.