Life Insurance policy is essentially a contract between an insurance provider and an individual whereby the insurance company grants financial protection to the customer in exchange of monthly fees. This arrangement is beneficial for both parties. In the case of the death of the policyholder, his or her family is granted a certain amount. There are various types of policies you can opt for depending on which suit your circumstances the most. They include Term Life, Whole Life and Universal Life Insurance policies along with several others. We’ve combed through the top three benefits of procuring a life insurance policy. Let’s walk through them together!
It provides you with a sound financial plan for the future
It is safe to assert that life is full of uncertainties and it is best to navigate through it with a solid plan in hand. Lack of finances to run a household, for medical coverage and other such expenses can prove to be grave concerns for a family, especially after the death of its breadwinner. Getting a life insurance suggests that your family will be protected in the blanket of financial security in times of such crisis.
In essence, life insurance helps with preparation for your loved ones’ health and happiness in the long haul. Knowing that they will be financially secure would also give you peace of mind. The money acquired after the policyholder’s death, can also assist in paying for funeral costs, routinely expenditures and school/college fees.
When you’re granted an opportunity to look out for your family even in your absence, it would be a mistake to let go of it.
It’s not as expensive as you think.
There is a widespread notion regarding life insurance being an expensive investment, which is simply false. For some reason, many individuals are misled into believing that getting an insurance policy is either a complex procedure or is too costly to consider. Statistics corroborate this as they state that merely 57% people had life insurance in 2019.
The narrative needs to shift and turn in favor of the policy as its multiple benefits are overlooked. Not enough light is shed upon the long-term savings and tax benefits that come as a result of getting life insurance.
Life insurance is actually reasonably priced and a lot more accessible than you would think. For a healthy 35-year-old, for instance, they can get a 25-year term life insurance policy with $260,000 of coverage for about $12 a month. Once you do the math, it all adds up- you can easily calculate how it profits you in the long-term and feel less scared about the investment you’re making.
Make systematic savings as life insurance can build cash value over time.
Permanent life insurance has a cash value or cash-surrender value, which suggests it can build cash value over time along with offering a death benefit in your beneficiaries. Similar to most retirement and tuition savings plans, cash values can amass on a tax-deferred basis and for any purpose- personal or professional- it can easily be utilized in future. To put this into perspective, the purpose can include down payment on a car, university fee or even income for your retirement.
Many a times, certain life insurance policies offer monthly pay outs in the form of annuities, which is a perfect way to target and accomplish retirement goals.
Now we understand; to calculate the life your loved ones will lead after your death can be a morbid thought. But this is exactly what should motivate you to make informed decisions. You must keep in mind that you can’t escape this inevitable reality and getting a life insurance policy can actually serve a slew of other purposes like we’ve mentioned above.