We all have been through the questions on purchasing life insurance for the most basic and important purposes, but you want to cover the expenses your loved ones will face on your death.
Many people would like to leave something more long lasting to their survivors, feeling it will give them true satisfaction. With having something extra, a spouse can feel secure in the family home, knowing that there’s money coming in to help maintain it.
Did you know that your heirs can be transformed into a lump sum that is a paid out on from your death into an income stream that could last four their lifetime?
This Is How It Works
There are a couple ways to do this; your heirs can use the life insurance payout to make a couple basic investments in bonds via bond ladder. This is known as a portfolio of bonds with different maturities. Here is an example, picture $100,000 to invest in bonds, you might purchase about 10 bonds with a face value of $10,000 each or you 20 with a face value of $5,000 each. These different bonds have different maturities.
One could mature in a year the others could be another two or three years. This portfolio would look like a ladder and the one benefit of this would be you could purchase bonds with different coupon dates, which will guarantee a monthly income.
Another great way to convert life insurance into an income is to use it to purchase an annuity. This is a contact that is between you and your life insurance company. You can give your insurance company your life insurance payout and be able to receive a guaranteed income stream for your whole life!
Be sure to contact your local Brazelton Insurance Group for any questions you have about your life insurance that could be in any way to help maximize your heirs’ income after your passing.