Although life insurance is often used for providing needed funds to surviving family members in the event of a breadwinner’s death, it is also used as a means for paying off debt. This may include payment of the deceased’s final expenses such as funeral costs and any unpaid medical bills, as well as paying down the mortgage on the family home for the policy holder’s survivors.
Other advantages for life insurance proceeds can include the funding of future education expenses for the insured’s children or grandchildren. With the high and rising cost of college tuition, life insurance can help a policyholder, to keep his or her promise to loved ones for obtaining a college degree.
Those who may be hit with estate taxes upon death may also consider purchasing a life insurance policy for the purpose of paying the amount due. Oftentimes, an individual’s loved ones are left to come up with needed estate tax funds by selling assets for below market value. Having readily available cash through a life insurance policy can rectify this situation, leaving family heirlooms and other important assets intact.