Sunday, 16 March 2014

LIFE INSURANCE

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses.” -wikipedia .Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. In most states, a person cannot purchase a policy on another person without their knowledge.
       None of us know when we’ll pass away. It could be today, tomorrow, or 50 years into the future, but it will happen eventually. Life insurance protects your heirs from the unknown and helps them through an otherwise difficult time of loss.
     Life Insurance is considered to be an important part of an individual’s investment portfolio, not necessarily to accumulate wealth, but to feel financially secure. Other then this when you opt for a life insurance policy you enjoy other benefits also, like tax-deduction options, and in some cases long term capital gains. What is important when you opt for a policy is the term and plan related to that particular policy. Always remember Life Insurance is primarily made keeping your family and those who are dependent on you in mind. There are various companies that would ask you to opt for a policy from them, and incase if you are an amateur investor and try to push things in a hurry, you might end up settling for a wrong deal. Here, we will discuss on a few guidelines that an individual should follow prior to opting for a policy or while assessing an insurance plan. Beside these above mentioned importance of life insurance there are quite other fascinating importance which are listed below:-
1. To Protect Your Family and Loved Ones
If your loved ones depend on your financial support for their livelihood, then life insurance is a must, because it replaces your income when you die. This is especially important for parents of young children or couples who’s partner will find it difficult if they no longer have the source of income provide by their partner.
You will also need to provide enough money to cover the costs of hiring someone to cover the day to day household tasks, like cleaning, laundry, cooking, childcare and everything else a growing family needs.
2. To Leave An Inheritance
Even if you don’t have any other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries. This is a great way to set your kids up for a solid financial future and provide for any monetary needs that will arise.
3. To Pay Off Debts and Other Expenses
In addition to providing income to cover everyday living expenses, your family needs insurance to cover any outstanding debts, like the mortgage, credit cards and car loans.
Other expenses include funeral and burial costs that can easily run into the tens of thousands of dollars. You don’t want your spouse, parents, children or other loved ones to be left with any extra financial burden in addition to the emotional burden they’re already suffering.
4. To Add More Financial Security
Like most parents you probably want to know your kids will be well taken care of when you’re gone. You not only want them to get a quality college education, but to provide for other life ventures like getting married or starting a business. For this reason, additional coverage is absolutely essential while your kids are still at home.
5. To Bring Peace of Mind
No amount of money can ever replace a person. But more than anything, life insurance can help provide protection for the uncertainties in life. Without a doubt, having life insurance coverage will bring you and your family peace of mind. It’s one thing you can be sure of and no longer question if they’ll be taken care of when you’re gone.

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