Insurance is designed to protect a person and their family against disasters and financial burdens. There are many types of insurance, the main and most important of which is considered to be life insurance. It provides for the needs of dependents after your death.
Since there are certain financial commitments that you must meet throughout your life and you contribute in some way to the family income, you must provide something even after your death - to secure the home, to help the family to meet expenses for a while, protect dependent parents, or secure children or spouse.
Financial obligations could include funeral expenses, unpaid medical bills, mortgages, business commitments, children's school fees, etc.
How much insurance a person needs depends on their lifestyle, financial needs and sources of income, debts and number of dependents? An insurance advisor or agent would recommend that you take out insurance that is five to ten times your annual income. It's best to sit down with an expert and go over why you should consider insurance and what type of insurance planning would benefit you.
As an important part of your financial plan, insurance gives you peace of mind in the face of life's uncertainties.
1. Properly planned life insurance will provide funds in the event of premature death to meet money owed, mortgages and living expenses. It provides protection for the family you leave behind and serves as a cash resource.
2. It secures your hard-earned estate on death by providing tax-free cash that can be used to pay inheritance and death taxes and to meet business and personal expenses.
3. Life insurance can have a savings or pension component that allows you to support yourself in retirement.
4. Some policies have riders such as critical illness coverage or term insurance for children or spouse. There are certain rules regarding runner eligibility that you will need to be clear about.
5. Having a valid insurance policy is considered a financial asset that improves your credit rating when you need health insurance or a home loan or business loan.
6. In the event of bankruptcy, the cash value as well as the death benefits of an insurance policy are exempt from creditors.
7. Life insurance can be planned to cover even your funeral expenses.
8. Term life insurance has double benefits, it protects and allows you to get your money back at strategic times in your life.
9. Insurance protects your business against financial loss or liability in the event of the death of a business partner.
10. It can help maintain a family's lifestyle when a contributing partner dies suddenly.
Insurance is essential for good financial planning and security, but you need to assess your personal risk and your long-term commitments. Insurance is a person in good standing throughout life and can be used for emergencies during a lifetime by requesting a withdrawal or a loan.
