What You Should Know About Life Insurance
No one wants to die or likes to think about death
. But your not thinking about death does not change the fact that thousands of people are dieing untimely due to accidents, fires or from illnesses. If something of that sort happens to you it will definitely affect your family both emotionally and financially. Life insurance helps your family by replacing the loss of your income that occurs when you die.What is meant by life insurance?
Insurance is a contract between the insured person that is you and the insurance company that is providing the insurance. In the event of your death while the contract is still in force, the insurance company will pay a specific amount of money to your beneficiaries.
What is the purpose of life insurance?
There are various purposes of buying a life insurance policy, some of them are:
1. Provides financial stability: It provides your family financial security in the event of your death. It protects them from financial ruin that may engulf them after your death.
2. Helps settle your financial obligations: Provides your family with funds so that they can settle your financial obligations and can also cover the loss of your income, after your death.
3. Provides future cash benefits: A good policy does not only replace the loss of your income but should also cover new costs. It should offer cash benefits that can provide for future needs such as the college expenses of your children.
Do you need insurance?
If your family will suffer economically after your death, then you do need insurance. If you and your spouse both work, then the sudden loss of your income will affect the income of the family immediately. This in turn will make your loved ones sacrifice on their future goals such as paying for the education of children.
Even if you are not married you will need insurance so that you can protect your family against future cost associated with your outstanding debts, your funeral expenses, etc.
What happens if you dont have coverage?
Your death itself would be a very traumatic experience for your loved ones. Along with this emotional trauma if they also have to undergo financial difficulties, it may break them completely. They will have to change their way of life, may be move into a cheaper apartment. Also they may need to take loans to pay off your outstanding expenses, funeral costs and medical bills. This will cause adverse effects on their lives which you would not want.
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