What Is Life Insurance?
In its simplest terms, life insurance is a contract with an insurance company where the insured pays a set amount of premium in order to secure a lump sum payout, known as a death benefit, for beneficiaries upon the insured’s death. Such contracts also cover compensation for Total Permanent Disability (TPD) in the event the insured loses the ability to generate income.
If nothing happens to a person, they may assume that they are invincible. Maybe they don’t feel that such financial protection is needed. Yet when an accident befalls them, what happens then? Facing death or disability, what kind of protection would you have in place for the loved ones left behind?
Why You Should Think About Life Insurance
To Ensure Your Immediate Family Has Some Financial Stability After Your Death
If you have dependents relying on you as the main income breadwinner, how should their lives go on when you’re gone? With the rising cost of living, how long can your family endure the financial burden of the household expenses, utilities, education and other necessary items without you around?
Life insurance can ease the financial burden of your absence by providing enough ‘back-up’ income for your family in the future.
To Pay Off Debts
Usually the passing of a loved ones also means shouldering the debts left behind, such as credit card bills or mortgages. However, the cash value of your policy can be used to service such debts, thereby relieving your family of the burden.
Leave an Inheritance
Not everyone has assets to their name. But life insurance allows you to name the beneficiaries of your policy so that they can enjoy an inheritance for education, to start a business or save for the future even if you can’t be there with them.
Peace of Mind
While life can be expensive, death can be even more so. Funeral expenses can soar into the thousands easily and this can be a strain on family finances coupled with your absence. Life insurance can ensure your family’s ability to cover for these short-term expenses as well as provide for their long-term needs.
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