why life insurance is important

 

You Need Life Insurance

Life insurance is essential for protecting your family's financial future after you die. Insurance policies provide income replacement during your lifetime and also provide for your dependents financially upon your death - just in case you pass away unexpectedly. In other words, life insurance is very important and needs to be considered when making life insurance buying decisions.

Life insurance offers financial security for the family and house in case of your untimely death. Avoid financial hardship for the family by purchasing life insurance. Even if only one spouse is a stay at home mom and does not bring in a regular paycheck, his or her untimely death means the surviving wife will now have extra expenses like cooking, child care, and housekeeping just to name a few. The couple's combined life insurance benefit amount can be quite substantial.

To take advantage of the policy, you need to first be insured by an insurer. When applying for life insurance, the applicant needs to provide the details of his profession, his marital status, date of birth, his address, his salary and annual salary range, his life assurance amount and his beneficiary. If the applicant qualifies for a higher amount of life assurance, he gets better premiums.

Life insurance can be either fixed or variable. A variable life insurance policy, in contrast, remains unchanged until it expires while a fixed life insurance policy, on the other hand, gives the insured person a choice to decide how much he wants to surrender as cash value on death. With a fixed life insurance, the death benefit is equal to the value of the cash surrendered plus the interest accumulated on the amount. If the insured person has not surrendered any cash value, the beneficiary receives nothing.

Your family will not be burdened with a huge debt after you die because your life insurance policy is fully paid upon death. It provides them with financial security and gives them peace of mind that their loved ones will still have a good financial future even if they stay living. Your spouse and children benefit most from a well-planned life insurance policy. In case you pass away before they reach middle age, the policy provides for their education. This will make them qualified for jobs and will provide a bright financial future.

The life insurance policy also provides for the death benefit not only to your family but also to your other heirs. With your life insurance policy, your spouse and children get a lump sum amount upon death together with the rest of your estate. Your spouse and children can use the rest of the estate to settle their inheritances. The rest of your estate will go to the beneficiary.

Many people today opt for term life insurance policies instead of whole life insurance policies because term insurance premiums are less expensive than whole life premiums. Term premiums last only for a limited period; however, you have the option to renew your policy for another term period. People usually choose to renew their policy for another term because renewing it annually cost them much less than purchasing a whole life policy. This is why many people prefer to renew their policies year after year, thereby paying small amounts each time and having large amounts of cash at the end of the policy period.

You also need a life insurance policy if you want to leave a legacy. If you leave your parents, spouse and children financially well off after you die, then you may need life insurance policy. It provides financial security to your children after your death as your dependents. Your dependents will be provided with enough funds to take care of themselves and your legacy will be equally preserved. Choosing a term life insurance policy is your best bet, especially if you do not have much cash at present and have no family to provide for after you die. The policy works just like an insurance policy, with premiums paid on a monthly basis and benefits paid upon death of the insured person.