Why Is Life Insurance Important? Read and Find Out
Life insurance. To avail or not to avail? The decision hangs in the air and is even harder when you are still at your prime and enjoying your youth. But what really is life insurance and why do we need it?
Here are few of the reasons that might help you decide:
Life insurance can replace your income to your dependents of you if you die. This is the most obvious reason. This is to ensure that your children can go to college and your family could still live comfortably even after the possibility of your early death. You still want the best life to leave them with even though it may not include you.
“My mother had taught shorthand and typing to support us since my father died, and secretly she hated it and hated him for dying and leaving no money because he didn’t trust life insurance salesmen.”
— Sylvia Plath
It could also be possible that you may be the breadwinner of the family and the moment you die, so will their.hopes and expenses. They won’t be able to afford the simple commodities and the needs of daily living. The salary you get is just enough for the bills and you don’t have enough money saved. If this is you, buying a life insurance would be a great help to your family that depends on you.
The choice is yours
The option of buying an insurance is yours. You could pot to have the term life insurance policy that could cover you in a number of years. This term is usually for 10 up to 30 years. You may benefit from during the period indicated in your insurance policy. These could be a good option if you want you want to be covered for a set of period such as a policy until your offspring finishes until college.
The option to buy a whole life policy could also suit you. This kind of policy is permanent life insurance. There are several types that usually pay benefit to your beneficiaries if you die. There are also subcategories of the types.
The amount of the insurance you avail will depend on the policy you purchase.
You know this already, right? Your insurance may be a good investment because you could actually get something in the future. A lot of young people today are looking where they could invest their money. Life insurance would be a variable policy that provides an additional investment because it could allow investment in stocks, bonds, and mutual funds. By buying a life insurance, your money grows quickly and the accumulation would be bigger in the future.
Though there are a lot of advantages on buying this insurance policy, you should also be open for the risks that come along with it. Be open to the possibilities of progress and failure and be vigilant enough where you invest the money you worked hard for. Make sure that you choose a policy where there is an investment feature. You can limit your risks by choosing one with the guaranteed minimum death benefit.
You can sell in cases of emergency
Life has its own unexpected turn and your life may change, too. In cases where you find yourself in an emergency and needed the cash bad, you could opt to sell the insurance policy that you bought. This time the policy you sell would come at a discounted price. Research well and inquire how this goes so that you will be guided accordingly on what settlement will suit you better. What usually happens is that you sell your policy to a viatical settlement company with the lesser price. The settlement company would make the premium payments and they will be the one to collect the amount if face value in the event of death. If you continued the payments and they inherit the amount, the lump- sum payment of cash would be a great help in case of non- availability of cash resources.
You can accumulate cash
By investing insurance policy, it is possible to allocate part of your premium ti a cash accumulation vehicle where it is usually available in life insurance policies. The amount that was accumulated will be like a reserve cash. Be sure t
That the available cash is enough to avoid lapses in the policy payments due to unavailable cash.
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