Anyone who wants or needs tax-free cash right away should have life insurance. Create a heritage or protect a heritage.
Does it mean that if someone buys a life insurance policy they have automatic and immediate access to tax-free cash?
It is possible but unlikely.
If someone buys a true life insurance policy, which means the first premium has been paid and the policy issued or they are covered by the temporary settlement that most companies offer, they die unexpectedly the same day and there is no suspicions of fraud. , the beneficiary(ies) is(are) immediately entitled to a tax-free death benefit. A certified death certificate is required to start a death benefit claim.
exceptions
If the policy is an accidental death policy and the insured person dies as a result of something other than an accident, such as a sudden heart attack or brain aneurysm, the death benefit will not be paid. However, if death occurred as a result of an accident, the death benefit would be paid.
more commonly
It is rare for someone to die immediately after purchasing a life insurance policy, although unfortunately, there are some who believe that purchasing a policy will bring death to their doorstep. Everyone has the right to an opinion or belief.
If someone buys a permanent life insurance policy, unless they buy a Single Premium Whole Life (SPWL) policy, it will probably be a while before there is any cash value that can be accessed. It’s not magic. It depends on how much was put into the policy and the type of policy. Any available cash value can be accessed at any time, even while you are still alive.
Advantages)
It should be obvious why most people should have a life insurance policy for their death benefit. The reality is that there are many people who believe that they do not need it or that they do not want it. Either they don’t realize the need, or they aren’t willing to admit it. Worse yet, there are those who realize the need, admit it, but do nothing about it. It’s one of those things where they plan to get there one day but that day never comes. Then sudden death occurs and there is a huge financial burden. Either that or death is imminent, but they can’t get it because they don’t qualify.
It’s better than having to take up a collection to pay expenses.
When someone dies, there are many things that need to be taken care of. Most of the time, little or no attention has been paid. At that point, who’s going to say, “I really don’t need this death benefit check”?
What if someone has a lot of money?
The need may not be as great in that case, but unless that person has done some careful estate planning, they will have to deal with estate taxes. Life insurance can be used to pay estate taxes and/or prevent the estate from having to liquidate assets.
