10 key reasons why a person needs life insurance
Insurance is designed to protect a person and the family from disasters and financial burdens. There are many kinds of insurance of which, the basic and most important is considered to be life insurance. It provides for the dependants after your death.
Since there are certain financial commitments you need to meet throughout life and do contribute in some way to the family income, you need to provide something even in death—to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse.
How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? An insurance adviser or agent would recommend that you take insurance that amounts to five to ten times your annual income. It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.
As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.
- Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.
Life insurance can have a savings or pension component that provides for you during retirement.
Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.
In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors.
Insurance protects your business from financial loss or any liabilities in case a business partner dies.
It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies.
Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan.
Also published on Medium.