Since you know what is Life Insurance, now it’s important for you to understand what kind of insurance you need to buy. Just like anything you shop for, what you first do is look for options similarly when it comes to buying Life Insurance, you first should understand what you need.
Having a life insurance policy can help your loved ones with anything you leave behind. This includes immediate ones times need like funereal cost. Even if you have any outstanding debts then your beneficiary can use the money to pay those off.
Once you buy a life insurance plan, you hope you will never need to use it but if the worst happens then you will be glad that you have it.
So, who needs life insurance:
- A new parent (on planning for starting a family)
- A sole breadwinner of the family
- Financial commitments like mortgage
- You are concerned with leaving behind a financial legacy
What is Life Insurance
Life Insurance is predominantly a contract between the policyholder and the insurance company, where the insurance company pays a specific amount to the insurer’s family upon his/her death. It basically offers financial protection to the policy holder’s family in exchange for a specific amount of premium.
Life is beautiful yet very uncertain. No matter how hard you work or whatever you do, you have no idea what life is going to bring for you. Henceforth, it is important not to take any chance because death is the only constant, it pays to insure it well in advance.
Benefits of Buying Life Insurance
Life Insurance is designed to protect the insurer’s family from any financial losses after the demise. It gives mental stability, peace of mind and confidence to the policyholder as well as to his or her family too. There are several benefits of Life Insurance. And some of them are:
Financial Security
Life Insurance products provide financial security to you and your family. It secures your family by choosing a life cover so that they can maintain their standard of living in your absence.
Wealth Creation
These plans help you to build savings and create wealth over time. Life insurance plans cover different types of risks and goals and protect your future.
Disciplined Investment
A life insurance plan influence to have a financial discipline because they offer different kind of unique investment opportunities with a wide range of products.
Retirement Planning
Life Insurance products help you to build a retirement pool that guarantees you get an adequate income on maturity and secure your retirement with savings as well.
Tax Savings
Life insurance plans give the benefit to transfer a policy’s death benefit income-tax-free to beneficiaries. No matter how big the benefit is $500000 or $50 million- the beneficiary won’t pay a single cent of income tax on the money they get.
Types of Life Insurance
Term Life Insurance
Term Life Insurance plan offers the nominee to get a fixed amount in exchange for regular premiums in case of any unfortunate incident during the policy tenure.
Permanent Life Insurance
Permanent Life Insurance is an umbrella term for life insurance that does not expire. Typically, it combines death benefits with a savings portion.
Final Expense Insurance
Final Expense Insurance is basically a small death benefit that is easier to get approved for. It used to pay for the funeral cost or medical care. It is significantly less than any normal life insurance policy.