Why you should use your tax refund for life insurance
Six reasons why life insurance is the ultimate purchase for those receiving a refund this year.
Whether you filed your taxes in time for April 15 or you’re taking your time because of the extended deadline, there’s a good chance you’re getting a refund. According to the IRS, 75% of American taxpayers receive money back, with the average payment being around $3,000. Needless to say, we’re not telling you this just to make conversation — we have a good idea of what you should spend that money on: life insurance.
Hear us out: If you use this year’s tax refund to pay for life insurance, it should be enough to pay the premium for years to come (which means you could spend next year’s refund on something else if you really want to). That alone should be sufficient motivation, but in case you need further persuading, here are six other excellent reasons.
In this article:
You won’t feel it
For most of us, a tax refund feels like free money. You don’t budget around it. And your taxes were taken out before you were paid — in a sense, the money was never really yours in the first place. Therefore, if you put your tax return towards life insurance you won’t even notice you spent it — how can you miss money you never had?
This year it will be hard to spend your refund on fun
Many people use their tax refund to treat themselves and/ or their loved ones to something special. Perhaps you were thinking of spending the money on a trip, or splurging at an expensive restaurant, or getting front-row seats at a concert, play or ballgame. Well, none of those fleeting pleasures is an option right now, since we’re all locked down at home, so why not spend the money on something less ephemeral, like life insurance?
Also, life insurance is fun
OK, we know it sounds dubious, but what is fun, fundamentally? It’s being carefree, relaxed, entirely devoid of worries. That’s how it feels when you have life insurance, because you’re free from the daily worry of how your family would manage without you if the worst should happen. Viewed that way, buying life insurance is practically a leisure activity.
It’ll save you an argument
If you and your spouse file your taxes jointly, it can be hard to decide how much of the refund is yours and how much is theirs. Do you earn more? Maybe you think you’re entitled to more of the money. Does your partner do most of the childcare? Well, perhaps they deserve more cash for themselves, since their labor is usually unpaid. Who withheld the most? This conversation could be endless. This year, skip that contentious discussion and buy something for both of you: whether you insure your life, your partner’s or both, a life insurance policy benefits the whole family. It’s a true joint purchase.
It’s a way to supersize your tax return
Perhaps you were hoping for a bigger refund this year. Well, if you really want your check to be worth more than face value, consider buying life insurance. For $37 a month, a healthy 30-year-old man can get $500,000 of life insurance coverage for 30 years. Now that makes your refund seem worthwhile.
Worst comes to worst, you’ll beat the system
When you buy life insurance, you have coverage in place and hope to never use it. But if the worst should happen, and your family ends up getting the death benefit from your policy, the money will go to them tax-free. If you’ve paid for life insurance with your tax refund, it’s almost like the money from your policy is tax-free twice — a fine way to stick it to the powers that be with your final act.
About Michael DavisRead more by Michael Davis
Our editorial policy
Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our editorial policy
Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.
Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.
Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.
MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.
Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html
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