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Life insurance policy is crucial and beneficial to your family after your death. It normally covers you in cases like your death, critical illness diagnosis, disability caused by poor health, terminal illness diagnosis, accidental death, permanent disability and incase you require long-term-care. Money accrued by the life insurance cover while alive can address many fundamental needs after you are gone or can no longer provide for your family due to disability or illness.
1. Provides income for your family after your death- when the breadwinner dies, the remaining family finances gets affected a lot as their main source of income is lost. Their income reduces, and they may have to lower their living standards. The benefits from a life insurance cover can reduce the financial impact for the family caused by the bread winner’s death. It is crucial to protect your family even after your demise as the grief their loss.
2. It helps achieve specific goals set by the insured- a breadwinner always has ambitious plans for his family. These plans may include college funds for the children, business capital or a home for the family. These plans do not have to end with your death as with life insurance cover; a portion of the benefits is set aside to provide for these goals.
3. The medical bill plus funeral arrangement expenses- before he dies, it is highly likely that he has accumulated a vast medical bill and exhausted the family’s savings. An illness can cost the family thousands or even millions depending on the type of illness. The funeral expense, even for an ordinary funeral ceremony is not small. The benefits from your life insurance cover; ensures your final expenses are paid and not burden your family.
4. You can get an emergency loan against the life insurance cover while alive- not all types of life insurance offers you this benefit. Some pay the benefits only after your demise, insurance cover types like whole life, universal life, and variable life insurance covers allows you a loan while still alive. This is because a portion of all premium payments made is invested in a different account. These loans have small interest rates, and you can repay the loan either with installments or lump sum. If you fail to pay your debts, the insurance company pays the loan with the accumulated money you borrowed the loan against.
5. Your debts and taxes get paid- the insured, at times, leave immense debts which must be settled and if with vast estates he might leave massive taxes to be paid. Before any property or cash is inherited by the family, his debts and taxes must be paid. If they do not have money to clear these debts and taxes, the family stands a chance to sell their properties to settle them. At times, the heavy penalties can lead to the family forfeiting the properties. Life insurance settles this obligation and reduces pressure on your family.
6. You can terminate the insurance cover anytime you want-if incase while still alive you decide to terminate your cover, you get all your investments minus the early withdrawal charges assessed by the company.
7. You can buy participating policies and get dividends just the same way stockholders get paid dividends. This does not apply to non-participating policies like Term life insurance.
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