It's also important to remember that your life insurance needs evolve over time. As your circumstances change (marriage, property, children, etc.), your policy may need to be adjusted, so it's good practice to reevaluate your coverage as part of your annual financial review.
3. It's beneficial at every stage of life. Some single professionals might think they don't need life insurance, because they are the only ones relying on their income. What they may not realize is that any outstanding debt in their name could have a profound financial impact on someone they love. For married couples or parents with additional dependents, life insurance can cover final expenses and help your family maintain their lifestyle should they pass away unexpectedly.
If you're a parent who has weathered the teenage years and have a son or daughter heading to college, you can use the cash value you've built up in the policy for college expenses. Bonus: Life insurance is not an included asset on the Free Application for Federal Student Aid (FAFSA).
Finally, although it may seem far away, you will stop working one day. The money you've accumulated in a universal life policy can help supplement other sources of retirement income. You can use it as a slush fund, to pursue a hobby, to travel more or to start a new business venture.
4. Your cash is yours (and your family's) to keep, tax-free. Cash-value life insurance policies have important tax advantages, either complementary to your other savings and investment vehicles or on a standalone basis. In a universal life insurance policy, the cash value grows tax-deferred. In most cases, it can also be accessed without a tax penalty via loan or withdrawal if an unexpected expense or emergency arises. Policy death benefits are also generally exempt from income tax.