When you purchase a life insurance policy that contains cash values, you’re essentially investing in your future. Your family will be able to use the money to pay for bills and basic living expenses, even when you are not around to save them money. It’s nice to be able to depend on your family, but what happens if something should happen to you?
If you are married, then most likely you and your spouse will use the policy in combination with a separate life insurance policy for the surviving spouse. This is a smart idea because you will have money set aside in case of a divorce, regardless of how much your other half pays into it.
Of course, if you purchase a policy that doesn’t contain cash values, then it’s no good if your family does not have access to their savings or credit cards Mortgage protection. It’s also really unpleasant if your loved one dies and you do not have the money to pay for a funeral or to pay for debts.
So, you really do need to make sure that the policy has both a savings element and a credit component, in case you should need those things in the future. A good way to find this out is to go through the policy papers and see what kinds of options you have with regard to borrowing and lending from the policy.
If you decide to purchase a life insurance policy that contains cash values, it will probably be a wise move for you to think long and hard about your financial goals. You will want to borrow against the policy if you must, but you also want to carefully build up some equity so that your family can enjoy some safety even when you are not around.
This is a very good reason to find a policy that has both an interest income and a line of credit built into it. This way, even if you pass away, your family will still have some money to live on.