The purpose of an insurance policy is to protect the beneficiary from financial burdens or disasters. Although there are many types of insurance policies, life insurance is considered to be the most important. What makes this type of insurance different from other types is the fact that people do no life to see the money they have invested in this policy. It is meant to provide for one’s dependants after you pass away and can’t provide for them anymore.
Your family can have a lot of financial concerns after your death like unsalted medical bills, mortgages, funeral expenses, college fees etc.
The amount of insurance required to provide for your family depends on your lifestyle, current income, outstanding debt and number of dependants. Some insurance agents recommend that your insurance policy should be worth between 5 and ten times your annual salary. The best would be to sit down with an expert so that you can discuss your insurance needs They would be able to tell you exactly what you need and what amount you should go for.
Life insurance, as with any insurance, gives you peace of mind for any uncertainties in life. Here are ten reasons why anyone would need life insurance.
1. Should you pass away prematurely, this policy will provide funds for outstanding funds and mortgages as well as living expenses. It is a cash resource for the family you leave behind and offers them protection.
2. It provides tax-free cash which can be used to pay all the bills your family might receive.
3. The policy may have a pension or savings option that can be useful during your retirement.
4. Some policies offer critical illness cover or include term insurance for your loved ones. You need to read the terms and conditions of your plan.
5. An insurance policy is considered as a financial asset these days. This can help improve your credit rating, should you need another type of insurance or loan.
6. Should you be declared bankrupt, then the value of the policy, as well as the benefits, will be exempt from any creditors.
7. If you plan your policy correctly, the policy can even cover your funeral costs.
8. Term life insurance can protect you and even offer cash back during specific events in your life.
9. Should your business partner pass away, it can protect your business from financial loss.
10. When you pass away, it can ensure that your loved ones maintain their lifestyle.
Insurance is an important aspect to consider, especially if you want to do right financial planning. Before buying a policy, be sure to assess your long-term commitments and personal risk. It can also help you in the case of emergencies as you can request a withdrawal or loan.