The fact that insurance proceeds are frequently tax-delayed is another benefit. The policy’s benefits and any other income you may receive are tax-free, except for employment insurance plans, where the benefits are treated like other forms of taxable income.
For instance, life insurance reduces the possibility that, even if you have enough money saved to pay off your remaining debt, your family won’t be able to cover the normal expenditures in the event of your sudden death. If you pass away while covered by lifetime insurance, the payoff to your beneficiary is tax-free.
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