life insurance advantages and benefits

Life insurance Advantages and Benefits

Life insurance Advantages and Benefits


Buying life insurance is one of the most crucial financial decisions; surprisingly only few of the world population are insured. However, why is it so important? Well, despite how much you earn, nobody knows what the future will bring. Many people die prematurely each year from sickness or accident and, if you happen to be the only breadwinner in the family and you pass away, it could have overwhelming consequences for your loved ones- their capacity to pay household bills, debts and maintain their standard of living.


The least you can do, consequently, is to secure your family’s financial safety by buying a life insurance for you and them.


 Moreover, do not underestimate the benefits of a life insurance throughout your lifetime, especially if you are young.

The Importance of life insurance

Life insurance will look after your loved ones even after you’re gone. This is the most crucial aspect of life insurance that one needs to consider. Your family is dependent on you even after you’re gone and you definitely don’t want to let them suffer. Whether it’s for renewing lost income, paying for your offspring’s education or making sure your wife/husband gets the essential financial security, life insurance could save the day for your remaining dependents.

The most commonly known case of this is parents with small children. However, it can also apply to married couples in which the survivor would be financially harmed by the income lost because of the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to depend on you financially. Insurance to take over from your income can be especially handy if the government- or employer-sponsored benefits of your surviving partner or children will be decreased after your death.


Life insurance deals with debts. You don’t want your loved ones to deal with financial debts during a crisis. Any significant debt-a home loan, auto loan, personal loan, or a loan on credit cards-will be secured if you happen to buy the correct life insurance policy.


Life insurance helps to achieve long-term goals. Since it is a tool that keeps you invested for the long run, it would support you to accomplish your long-term goals such as buying a home or planning your retirement. It also provides you with diverse investment opportunities that come along with many types of policies.

Some policies are connected to particular investment products that pay dividends based on their performance. If you are going for an investment-linked policy, make sure to read the fine print to be fully wise of the potential risks and returns.


Many types of life insurance constitute cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the holder’s request. As many people make paying their life insurance policy premiums of a high importance, buying a cash-value type policy can create a kind of “required” savings plan.


Life insurance is not beneficial only for yourself and your family. Many insurance policies also look after your business. If you have a business, then your business partner can buy your portion of the business without difficulty. Your business partner(s) will enter a buy-sell contract and the payout would go to the former partner’s nominees, however without giving them a stake in the company.

While we are all knowledgeable of the death benefits these insurance policies offer, we know little about the different options they lay out that could help strengthen your financial position.


A term insurance offers protection for a given period of time (10, 20 or 30 years) and pays out the benefits only if you pass away during the term. The policy will expire and coverage will end if you live longer than your policy.


Life insurance can serve for tax-saving purposes. You could save taxes with insurance policies regardless of what plan you purchase. The premium you pay on an insurance policy is qualified for a maximum tax benefit.


It can also be a tool for forced savings. If you choose a more higher than what it costs to insure you. This amount of extra money is invested and it carries cash value. This cash can then be borrowed from the policy or you can choose to sell it or get income from it.


You may not be eligible for it later. Life insurance policies run on unpredictability. You may be healthful now and paying a premium for life insurance may consider being an added financial burden, but if you accidentally fall ill, you may not be given the opportunity to buy a life insurance policy. Thus, it is wise to buy one early on in your life because it stays in force if your health gets worse later on. Insurance companies let you to attach certain riders or benefits to your current or new policy.

These riders increase the quality of your insurance. The accumulated death benefit rider, for instance, lets the policy owner to account all or a part of the policy’s death benefit if he or she has less time to live because of severe illness, or wants to use the money for medical treatment or related costs.


Lastly, it gives you the peace of mind. Death is inescapable. In the face of misfortune, the least you can do for your family is to protect their financial future. Even if it is a limited policy, you know that you’ve done all you can to help them overcome difficult situation.


We can’t know when we’ll leave this world. It could be today, tomorrow or many years from now, but it will happen at some point. No amount of fortune could ever replace a person. But more than anything else, life insurance can support in providing protection for the confusion in life. There is no doubt, having life insurance policy will give you and your family peace of mind. It’s the only thing you can be sure of and you’ll no longer have to worry whether they’ll be looked after when you’re not with them. Life insurance protects your loved ones from the uncertain and helps them through an otherwise extremely hard time of loss.


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