Life Insurance - A Stich In Time Saves Nine
Life insurance provides money to your family or loved ones if you should die. Life insurance can also help protect the financial interests of a business if a key employee should die. Here, we will discuss the use of life insurance for your family. And, you must ask that question now, before you die of an accident or are diagnosed with a deadly disease. Once you are involved in a deadly accident, it's to late to obtain life insurance. And, once you are diagnosed with a deadly disease its awfully hard to obtain life insurance.
However, people die of accidents and diseases every day. About 2.5 million people in the United States die each year. Problem if you have family who depend on their purchasing power, the important question to ask is "What happens to them if I am no longer around to provide for them?" I do not want to be faced after his death. While diseases top the list of causes, more than 100,000 people die each year from accidental causes. Now, nobody likes to think of the consequences of his death.
Life insurance can take care of and make available for these numbers so relatives after his death. Life insurance can provide the funds needed before your partner can offset income. Life insurance can provide care and schooling of their children after their death. Life insurance can help after his death. Life insurance can pay the debts.
a) Life Insurance Can Also Pay Off Debts After you
Your income is probably what gives the money to pay your mortgage payment. Your mortgage usually represents the most debt. Life insurance can be used to pay the mortgage debt if your income is lost. Millions of households have credit card debt large. They often can not pay their credit cards each month. Life insurance can be used to pay off that credit card debt. Those families who rarely pay their credit cards have an average debt of nearly $ 8,000. And many families who declare bankruptcy have tens of thousands of dollars in credit card debt. Many families live in a house with a mortgage important.
* Life Insurance can provide for the Care and Education of Your kids
If you are a family with "special needs" children, you may be paying for special tutoring or childcare. A university education often costs $20,000 a year or more. Your savings and investments over the years could help pay that cost. But, if your income stops before those investments can grow to help your children with their education expenses, your children will have less money available to get them through their university education. Life insurance can be used to help provide the educational costs of tuition, books, fees and living expenses. These expenses will continue beyond your untimely death. Life insurance can help provide for your childs special needs. This help could continue for quite some time.
c) Helps secure your spouse's life
Depending on the age of your spouse or other circumstances, her husband can remarry and have another source of income for your spouse may or may not be able to offset their loss of income. . Wait until a disability pension or Social Security provides an additional revenue stream. Increase income from employment or business. While life insurance sales people often want to consider the requirements of their family income for life, this is often beyond what is really needed. The nominal value of life insurance can be adapted to help provide the income stream through this transition period. Life insurance can help his wife make the transition from the time of his death when a new source of income. Normally, as age increases and income from pensions and Social Security are close at hand, decreases their need for life insurance. And if they have accumulated enough financial resources, their need for life insurance is almost nonexistent. You need to consider how big a revenue stream to their spouse's needs and how long before a successful transition to other sources of income can be made.
Types of Life Insurance
There are two basic types of life insurance. First is term life insurance and second is whole life insurance.
In first Term life insurance is simply a contract that calls for you to pay a premium for a certain number of years for a certain face value of life insurance. The length of the contract can vary from 1 to 30 years. If your term policy ends without your death, you receive no benefits. If you die before your policy ends, you survivors receive the full face value of the insurance. In Second term, life policies are called "decreasing term" because the face value of the policy decreases over the years. Term life insurance policies are often "renewable" when they expire, allowing you to get another policy of term life insurance without a new physical examination.
Several factors are important when considering whole life insurance. Rate of return, the speed at which policy is based cash value is often lower than the rate you would get if you invested elsewhere. These plans can be called variable universal life insurance, variable life insurance, or any other name. You should understand clearly, when cash value begins to build, often insurance policies whole life do not allocate much of their premium to begin building a significant cash value before you have paid in politics for 10 years or more.
Such variable designs can be called universal life insurance, variable life insurance, or other names. Several factors are important when thinking about whole life insurance. Rate of Return, The rate at which your owner builds funds value is often below the rate you could get in the event you invested elsewhere. You ought to clearly understanding, When Funds Value Begins to Build, Often whole life insurance policies do not allocate much of your premium to start building a significant funds value before you have paid in to the owner for 10 years or more. Whole life insurance is also offered with some variations in premium payments & face value amount.
If you need life insurance needs to determine how much insurance is appropriate and the type of life insurance policy that best suits the needs of your family. It is advisable to consider purchasing a life insurance policy term and invest the excess of what the life insurance would cost. In general, you should evaluate your situation to determine whether you need life insurance. That way would have the benefit of both life insurance and a higher rate of return on your investment. You should carefully consider the life insurance and term insurance plans life.
by: Iftikhar tirmizi