6 Compelling Benefits of Having a Life Insurance

Nobody has the power to know when their time of death will be due, nor can anybody stop it when it comes.  When it happens to a sole breadwinner, loved ones could be left, not only in sorrow but also in shock and economic pressure.  An undertaking to understand the benefits of having a good life insurance is important.

If you want to protect your loved ones from accumulated debts, the burden of college fees for dependents, heavy taxation burdens on the inherited estate after your demise, you should consider getting a good life insurance policy.

Let us have a look at some of those benefits.


1. Life Insurance Benefits Helps Your Family Pay-off Your Debts

Major debts like mortgages take many years to clear in most cases. It is easy to pay the mortgages when you are alive and working. Should the mortgage outlive you and death occurs, your heirs will be left with the challenge of carrying that burden.

How can you prevent this?

When you purchase a good life insurance policy, the death benefits to your family will be sufficient enough to settle some of these commitments like mortgages.

Furthermore, the inherited property may attract taxation due to change of ownership. The benefits they receive as settlement of claims can be used to pay these taxes and leave your loved ones without a tax burden to worry about

2. It Can Help in Covering Final Expenses

Sometimes burial uses a lot of money and the ones left behind are expected to meet the expensive cost. Part of the proceeds can be sourced from the settlement of the claim after the death of the person insured.

What happens in such a case is that, your family may decide what amount to use in as far as the burial expenses go, the remaining amount can be used for their upkeep.

In that way, your family is protected from the burden of footing the cost of the funeral. They are actually left with some or most of the money for their upkeep.

3. A Good Life Insurance Enables You to Face the Future with Confidence

It is not the confidence of being immortal; rather, it is the confidence of knowing that, despite the fact that death is inevitable eventually, you have planned for it. Your loved ones will not suffer in your absence.

This is important because it contributes to peace of the mind and some assuring comfort. It gives you a sense of security. It assures you that, even if

A good life anything happens to you, your heirs will be safe and catered for.

This builds confidence.

4. It Protects Your Loved Ones from the Sudden Loss of Income

This happens in case the policyholder is the sole breadwinner in the family. Sudden demise means that the family’s source of income is interrupted and that there is no other source available.

The loss and shock can be huge and potentially damaging.

It is therefore wise to get a good life insurance cover. This is because the settlement amount will come in handy in ensuring your loved ones a sense of continuity. At least in as far as meeting financial obligations is concerned. The children, therefore, will not be shocked to find their lifestyle changing all of a sudden.

The trauma of the loss of a loved one can be made even worse for the children if, for example, they find their family moving from the neighborhood they have been accustomed to, to a less safe neighborhood. All these happen because it is no longer affordable since their main breadwinner is no more around.

That is why this is definitely one of the benefits of having a good life insurance. Your money will still be working for the good of your family, even in your absence. That is the essence of good planning.

Taking a good insurance policy is planning for the unpredictable future with the interests of your loved ones being at the center of your mind.

5. It Helps Build a Cash Value for a Rainy Day

Some, if not most, of the available types of life insurance policy offer the benefit of cash-value. This comes from the arrangement whereby the premium contributed is divided into say, three parts.

  • The first part actually contributes to the actual claim that will be paid upon death
  • The second part funds the cash-value (a saving plan that earns interest and which you can borrow from)
  • The third part is what the company takes as its profits

From the arrangement above, you can see how the cash-value works. It works like a go-to kitty in case you face an emergency like a major illness which may require quick financial intervention.  You can borrow against the cash-value system. In case the loan is still outstanding at the time of death, it can be recovered from the final settlement.

6. Some Policies Can Allow for Adjustable Premiums

Just as everything else in life is not static, the economic status of a person may not remain static too. There are ups and downs. As such, the policyholder may want to adjust either the monthly premiums paid or the total value expected.

The adjustment could be upwards or downwards. For example, in case the contributor loses their job, they may opt to continue contributing but give a lower amount as monthly premium. This particular kind of adjustment is possible.

It is this flexibility that makes it worthwhile to choose a good policy for life cover.

On the bottom line, nothing is perfect, and so it is not always that we will talk of benefits. Sometimes, life insurance has disadvantages too. Factors like:

  • Prohibitive costs of the policy
  • Fraudulent insurance
  • No direct benefit for the policyholder

These are among some of the setbacks of life insurance. 

That said, however, it is important to take note of the fact that the benefits of a good life insurance policy far much outweigh the few disadvantages that can be experienced here and there. In any case, the disadvantages are some isolated cases which are almost negligible.

Go out there and get insured. You are doing it for your loved ones and serving them is greater than anything else. It is a legacy worth investing in.

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