Life Insurance plans with other benefits ?
Social security benefits
Social security will provide a survivor’s benefit upon the death of a worker eligible for social security. Of course, you will have to make a decision as to how you feel about the future of social security and consider the political risk (Congress) as well. Any social security benefits payable will reduce the amount of income that will need to be replaced.
Social security benefits are also available to the surviving spouse if there are children under the age of 16. Social security is also paid to a child or children until they turn age 18 or 19 if still in high school. Also, note that social security is available to widows or widowers at age 60 if the spouse had been covered. The period when no social security benefits are available is called ‘blackout period’. Calculating the payable is complex and is best done by contacting the Social Security Administration directly.
Retirement Plans
Retirement plans, which are usually defined as pension plans, 410(k) and other profit sharing plans, along with tax sheltered annuities, Simple Plans and IRA’s can all be used as a source of income replacement. Distributions from retirement plans require careful planning and though in order to receive the maximum benefit form the life insurance plan. Besides the issues of Capital Preservation as opposed to Capital Liquidation; there is the issue of whether these funds should be left to grow on a tax deferred basis as well as the issues of avoiding any income tax on the gain from the funds.
Current Life Insurance Plans
This includes any personal, individual insurance as well as any group life insurance (through an employer, etc). With group life insurance, you may also choose to not include it as usually it is not effective while you are with your current employer.
All in all possessing life insurance stands out as a support for your family when they mostly need it. It is important to calculate the right amount of life insurance that you need to be rightly insured.
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