Benefits From Life Insurance - Why Should You Endeavor To Have One
To many people, life insurance is just an expense
. To people who do not know the benefits derived from this - then it really is waste of money. Others do not want a life insurance because it seems morbid - they think of it as mere death benefit. And who would want to think of his death? Unless of course people get educated on its value then, perhaps everybody will try to find a life insurance underwriter.
Let us get morbid first and see its relevance to death. When you die having a life insurance policy, you are actually leaving money to your heirs. The money can go a long way - especially when your children are still young. The proceeds can start a brighter future for them and your death becomes less of a grief. With this, you are actually protecting your family from any financial difficulties brought about by your untimely death - especially if you are the family bread earner.
For the affluent and the rich people, life insurance can be a part of their estate planning. The proceeds of the insurance will cover the estate taxes upon the insured's demise. In this instance, the heirs will receive the total amount of the estate. Otherwise, the heirs will have to raise the amount to cover the taxes to be able to get hold off the estate.
If you have mortgage payable - for instance an encumbrance to your residential house, the insurance proceeds can be used to pay-off your creditor. In such situation, you will save your assets in favor of your heirs. The house can already be clean very soon after your death and it can be transferred in your heirs' name.
But benefit to life insurance is not only for the heirs. It is not only pertinent to death. If the insured gets to live and survive the stipulated maturity date of an endowment policy, then the insured has invested for his future. Upon maturity, the face value of the insurance can be collected by the insured, use it at his own discretion.
This is even more beneficial if the insurance was purchased at a younger age. The premium to be paid is still low and the face value of the policy is high. This can be conceived as a long term investment with high yield. And upon policy maturity, you can collect the proceeds.
You can also consider a life insurance policy as a retirement option, should you outlive the term of the plan. The proceeds can be re-invested to become your pension scheme.
To get the full benefit from life insurance, your amount of coverage should reflect your value. Take the case of your estate planning. You know more or less the value of your estate. You can consult your financial planner as to the amount of tax due for such value of estate. Thus, you can purchase a life insurance policy that can cover the estate taxes.
While it is true that a life insurance is a long term investment before the benefits are enjoyed, the reward is worth the long wait. Not for your death but for the maturity of the endowment policy. You will understand that a life insurance is not only about death, it is about your future and the well-being of your family.
by: alona Rudnitsky
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