Life Insurance as an Investment: Pros and Cons

Investing in your family’s future prosperity and financial stability should be a top priority. Severe accidents and unexpected misfortune may always be just a moment away. That’s why, regardless of health or current fiscal circumstances, life insurance could prove to be a crucial investment. However, like all financial decisions, there are advantages and disadvantages to be weighed when considering your coverage.

Benefits of Having Life Insurance

Purchasing and maintaining the right life insurance policy could one day prove to be one of the most important decisions you’ve ever made. Whether you take out a policy on yourself or a loved one, such as a spouse or child, doing so can ensure that those left in the wake of tragic loss have the means to manage potential financial difficulties. Specifically, life insurance payouts may help pay for the following:

• Funeral expenses

• Income replacement

• Remaining debts

• Outstanding medical bills

• Estate taxes

• Administrative costs

Furthermore, many types of life insurance may include savings opportunities, as cash value components can accrue value over time. These funds can often be borrowed against with minimal consequences or invested in various stocks and bonds, potentially bolstering your overall financial portfolio.

Concerns About Your Coverage

Still, while life insurance may often be seen as a universally advisable investment, there are things you should think about when shopping for a policy. Consider the following potential drawbacks of investing in coverage:

• Outliving your policy—Term life insurance can help provide an affordable coverage option and financial security for a predetermined period, but there is no return on your investment should the insured outlive the policy.

• Limited growth—While permanent life insurance, such as whole life and universal life policies, can offer savings opportunities, the accrual rate may have less potential than if you were to invest in other opportunities.

• Lack of adjustments—Many policies may include stringent specifications that cannot be adjusted once you’ve made your purchase. For example, you might not be able to adjust the death benefit despite changing needs.

We’re Here to Help

Contact TS Insurance in Katy, Texas, today to learn more about coverage options and ensure you are making the right decisions about life insurance.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.