Posts

life insurance policy - Complete Controller

Most people don’t think of death in terms of their funeral and the costs associated, and often leave family members unprepared for the costs. Some life insurance policies will include death benefits that can be used towards funeral and final expenses. When choosing a life insurance policy, if you already hold life insurance, ask your agent about adding death benefits to your policy. The main importance is to get something in place now. The burden that a funeral and final expenses can have on the loved ones left behind can be overwhelming. Check out America's Best Bookkeepers

If you don’t carry or cannot carry life insurance or you want to carry separate insurance for end of life expenses, there are two funeral life insurance policies that are specifically designed to relieve your loved ones of this expense in their time of grief. Burial insurance and preneed funeral insurance. These life insurance types allow you to finance your funeral in advance, but there are some differences between the two you need to understand before deciding on which will best suit you and your family’s needs.

Burial Insurance

Burial insurance is a policy designed to cover your funeral or cremation expenses when you die. Burial insurance policies can vary between companies that offer life insurance, and like other life insurance policies, it comes in both term and whole life. Generally, death benefits for burial insurance are low, ranging anywhere between $5,000 up to $25,000. Check out America's Best Bookkeepers

Burial life insurance pays the death benefit directly to your beneficiary. It can then be used to finance your funeral and cover other final expenses in any way the beneficiary chooses. If they receive a higher benefit than the funeral cost, it is up to their discretion on how they use the remaining amount. It is often used to pay debts left behind or other final expenses.

Preneed Funeral Insurance

Preneed funeral insurance is also designed to finance your funeral before your death, similar to burial insurance. The main difference is that the funeral costs are predetermined, including services, merchandise, and church and burial services. It can also protect the costs from going up on the funeral expenses. These expenses are a locked-in, negotiated cost at the time of the insurance purchase.

Another difference from burial insurance is that instead of paying your beneficiary benefits when you die, the money goes directly to the funeral service provider of your choosing. This policy is paid in full once the negotiated amount is met through premiums, and the policy remains in effect for the entirety of your life. This policy will relieve your loved ones of the funeral costs and stresses.  Check out America's Best Bookkeepers

Conclusion

The arrangements are premade, which leaves little to deal with for those left behind after your death. However, there is no additional death benefit that can go towards final expenses or unpaid debt.

Both burial and preneed funeral insurance are beneficial to your loved ones after your death. It would be best if you determined which would better benefit them by deciding whether you will leave behind debt or other expenses or not. You also can prepay and plan your funeral directly with the funeral home of your choosing. This option would be similar to preneed funeral insurance. Instead of the funeral home receiving the payment at the time of your death, you will pay the costs in full directly to the funeral home, who will execute your plans once you’ve passed. Whatever option you choose, financing your funeral before your death is a great relief to your loved ones once you are gone.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Why take out a life insurance policy?

A life insurance policy can meet different objectives, which explains why it is the preferred investment of savers.

  1. Make your savings grow

Life insurance contracts offer a range of vehicles to invest your savings according to your risk profile. Those who refuse any capital loss will be able to move to the dollar fund, while those who favor yield will add units of account.

Two types of contracts coexist: single life insurance, also known as dollar life insurance and multi-asset life insurance with unit-linked funds.

  • Monosupport life insurance makes it possible to invest your savings without risk. The contract works like a savings account. The capital is guaranteed and produces interest.
  • Multisupport life insurance includes, in addition to a risk-free dollar fund, funds to invest in various asset classes (stocks, bonds, real estate, etc.) more or less risky.

It is all the more interesting to place your savings on a life insurance contract that can be withdrawn at any time if necessary, with a limited tax impact even before 8 years. If you do not wish to draw in your life insurance policy (for tax reasons, for example), you can benefit from an advance. The insurer of the contract grants you a loan at a rate slightly higher than that of the fund in dollars, which avoids any withdrawal.

  1. Prepare for retirement

The availability at any time of the funds invested in a life insurance contract may lead to prefer this support to prepare for retirement. The PERP or PERCO type of dedicated products require the funds invested to be locked in until retirement.

Upon retirement, the insured may also choose to receive a retirement supplement in the form of a life annuity. In this case, the earnings will be exempt from income tax (they will bear the only social security contributions). The pension paid will be taxable on a fraction of its amount depending on the age of the beneficiary.

  1. Pass on a heritage

Life insurance makes it possible to grow capital and / or prepare for retirement. It is also a formidable transmission tool, since it escapes the applicable civil and tax rules in matters of succession. Life insurance does not fall within the estate of the insured, who can thus pass on wealth to a distant relative or a third party by evading inheritance tax.

  1. Favorable taxation

While life insurance has long benefited from a lighter taxation compared to the securities account, even the PEA, the introduction of Flat Tax has significantly reduced this advantage.

However, life insurance has the advantage of being able to arbitrate (sell funds to buy others) by being exempted from tax and social security. These withdrawals will be paid only in case of withdrawal or closure of the contract. In the case of a securities account, however, each capital gain is accompanied by the payment of the corresponding taxes.

If all life insurance contracts make it possible to grow your savings, prepare for retirement, or pass on wealth, why favor one over the other? What are the criteria for choosing a life insurance policy?

 

 

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.