Why Buying Life Insurance is Better Than Crowdfunding
It seems like every day, you get a text or email asking you to donate to yet another crowdfunding campaign.
If you feel like you've noticed a serious uptick in crowdfunding requests, especially when it comes to covering personal expenses, you're certainly not imagining it. In fact, the popular crowdfunding site GoFundMe sees about 3,300 new personal crowdfunding campaigns daily.
Many people are relying on crowdfunding sites to help with medical expenses or to help families make ends meet financially when they are affected by an unexpected death by way of donations.
You may have even thought about relying on crowdfunding yourself. After all, you've given to countless campaigns -- why shouldn't people return the favor to your loved ones if something happens to you?
This isn't a smart move, and you know it.
Read on to learn why taking out a life insurance policy -- not crowdfunding -- is the right move.
Life Insurance Guarantees a Payment
If you think your family will be able to rely on the generosity of friends, family members, and even strangers to provide them with the money they need if you pass away, think again.
Less than one-third of crowdfunded campaigns actually reach their goal.
Some sites don't let the campaign beneficiaries collect any of the money if the goal isn't met, while others will still give them the money that they did raise, knowing that it's just not enough to make up for the loss of your income.
Are you really willing to roll the dice when it comes to the financial security of your family?
When you purchase a life insurance policy, you can rest easy knowing that your family is guaranteed the death benefit -- and that in most cases, the amount will be consistent with what you would have been able to provide.
You also have choices when it comes to the type of policy you choose.
You can choose term life insurance, which provides the most coverage at the lowest cost and will cover you for a set period of time. Or you can choose whole life insurance, which is more expensive than term but builds cash value with coverage that lasts your entire life.
You don't get those kinds of options with money raised on a crowdfunding platform.
Crowdfunding Sites Hit You With Heavy Fees
While you do have to pay premiums for a life insurance policy to stay inforce, there are no fees or taxes taken on the death benefit paid to your beneficiaries if you die. This pales in comparison to what a crowdfunding platform will try to take out of the money raised.
These crowdfunding fees often take out a large percentage of the total amount of the funds raised -- but that's not all. They may also charge you to host your campaign, or a credit card processing fee on the donations you receive. In addition, if you don't reach your funding goals but are allowed to keep some of the money raised, the percentage fee will be even higher.
Crowdfunding is hardly free money.
Last but not least, life insurance premium payments are clear, up-front, and do not suddenly change overnight without warning. That's just not the case with crowdfunding platforms.
Clear Tax Implications
Finally, life insurance death benefits paid to beneficiaries do not have tax implications.
Money that's raised on a crowdfunding platform, however, is definitely at the mercy of the IRS.
Especially given the recent changes in tax law, it's pretty tough to know how much of that crowdfunded money you'll need to fork over to the IRS -- and many people end up asking for far too little because they haven't taken taxes into account.
It's Time to Replace Crowdfunding with Life Insurance
As you can see, relying on crowdfunding platforms to provide for your family if something happens to you just isn't a smart move.
Not only do you have to fight against compassion fatigue, but crowdfunding campaigns often leave loved ones in the dark about tax burdens, the amount of money they'll get, and whether they'll even be able to raise the money they need at all.
Life insurance is always the better option.
Want to learn more about your different policy options so that you can decide which one is the best choice for your family and financial needs?
We're here to help.
We invite you to visit our website, www.vantislife.com to learn more about specific products, get advice, and most importantly, begin the process of protecting your family.
Our content is created for educational purposes only. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Vantis Life encourages individuals to seek advice from their own investment or tax advisor or legal counsel.