Do We Really Need Life Insurance?
- Honey Guanco
- Feb 26, 2018
- 3 min read
According to the survey, there are only 4% worldwide are insured, maybe one of the reasons why is because they are skeptical to talk about the promise of insurance or maybe, lack of financial literacy. Some people thought that insurance is a tricky thing to know about, not fun to talk and definitely not the process anyone enjoys. But most everyone is aware that they need life insurance but unfortunately they don't buy it until they sold it to them. But here's a question, Is life insurance something that you really need? How does it work? Is it something you will really benefit from? Let's learn and see the most important reasons why people need life insurance.
10 Reasons Why You Need A Life Insurance
1. Income Continuation for your loved ones even after you had gone. As a father, income earner it is very important for you to protect your family. Provide them what they need when you are alive but what if life uncertainties arises? Probably you don't want them to suffer because when you die your income dies with you also, right? But with insurance, it would be possible to provide for them even after death. You're family, dependents can still continue the standard way of their living, much more, they can be able to survive for years, making your child's education secured. Your insurance could save your family financially because it will be the replacement for your lost income. But how long? Until when? Better talk to a financial adviser for your needs.
2. Debt Saver. Of course, as a responsible income earner, you don't want your family to suffer from financial liabilities during a crisis any outstanding debt, maybe a car loan, house loan or even credit card will be taken cared of.
3. Peace of Mind. Oh yes! Why? life is full of risk. We cannot avoid death. In case the family will face life uncertainties, the least you can do for your family is to secure their financial future. You won't bother for them financially cause you left something for them to survive even for shorter years.
4. Helps you achieve your financial goal. Insurance nowadays has an investment portion that would keep your money invested for your long-term goals. Your money is invested in stocks so, in the long run, it will grow up to 10% or higher and you can get it lump sum and use it for your long-term goal such as buying a house, education and even for your retirement.
5. Life insurance for your retirement. If you would be living too long, with life insurance, you can sustain your needs for your retirement years like buying maintenance medicine, travel. You can ensure you have a source of regular income every month. It is like a pension plan, putting money in an annuity regularly and enjoy steady income regularly even after retirement.
6. The best time to buy. Getting an insurance in your younger years is cheaper. And the best time to buy it is when you do not need it. Why? Because you will get standard rate than among others who might think they will be needed it soon because of their health issues.
7. Estate tax saver. You can't run out of taxes especially if you had properties to transfer to your heirs. After the death of the insured, the heir is responsible to pay 20% of the proceeds. But life insurance is the only exempted from the estate tax.
8. You may not be approved for it later. Sometimes people tend to realize that they need life insurance when life uncertainties, health setbacks happen already. But unfortunately, it is subject to approval and possible smaller chance to get approved because of the risk.
9. Encourage you to save. Life insurance has a systematic way of saving while you are paying premiums for your life protection. You are doing long-term savings and at the same time, you are protected. Should uncertain things happen just like health setbacks, your savings won't be used because there's a fund or health insurance that will cover the expenses. And in the long run, if the policy matures, the policyholder can get a lump sum pay-out.
10. Ensures Business Stability. If life insurance can support the life of family should the uncertain things happen, your business debt or asset would be protected.
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