Not everyone needs life insurance (also called life insurance and death insurance). But if your children, partner or other relatives depend on your income to cover your mortgage or other living expenses, the answer is yes – you probably want life insurance because it will help support your family in the event of death. Why have life insurance?
Life insurance is not sexy. Talking about it is not cool and it is definitely not a process that everyone enjoys. However, like death and taxes, buying life insurance is an essential part of life and a key element of sound financial planning. Most people realize that they need life insurance, but in my experience most people delay the process until an important life event occurs that forces them to buy. However, there are major benefits to getting insurance early, especially if you have a debt, are married or are planning a marriage, have or are planning to start a family, or are a business owner.
Why is it worth having life insurance?
If your loved ones depend on your financial support for maintenance, then life insurance is a must because it replaces your income after death. This is especially important for parents of young children or adults who would have difficulty maintaining a standard of living if they no longer had access to income provided by the partner. You’ll also need to provide enough money to cover the cost of hiring someone for your daily housework, such as cleaning, washing, cooking, babysitting and everything a growing family needs.
How does term life insurance work?
Timely life insurance is fairly simple – use it or lose it. In other words, you pay an annual premium (determined by the insurance company) for the “period” of the policy (usually 20 years), and if you die within those 20 years, your beneficiary will receive the specified amount indicated on the policy. For example, suppose you bought a 20-year policy for $ 1 million and the bonus is $ 600 a year. Assuming you are up to date with the premium, if you die within 20 years, your beneficiary will receive $ 1 million, excluding tax. There are many other types of life insurance, but for our purposes today we will focus on a 20-year term.
We don’t know when we will leave. It could be today, tomorrow or in 50 years, but eventually it will happen. No amount of money can ever replace a person. But above all, life insurance can help protect uncertainty in life. Without a doubt, having life insurance will give you and your family peace. This is one thing you can be sure of and you will not have to ask if they will be taken care of when you leave. Life insurance protects your heirs from the unknown and helps them in a difficult time of loss.