What do love and life insurance have in common? Everything! The motive behind purchasing life insurance is love. Perhaps one of the most endearing expressions of love is a life insurance policy to help provide for your loved ones when you aren’t there. Life insurance can never replace your family’s loss but it can reinforce the love they know you always had for them, while helping to provide for their needs.
Thinking about death or life after death is not a fun thing to do. No one wants to sit around planning for life after death. The reality however remains that losing a loved one is one of the hardest emotional struggles one can go through and it is especially tougher on dependents. The emotional pain caused by the loss is hard enough without adding financial struggles to it. It becomes tougher on families if the deceased is the breadwinner. This is where a life insurance policy comes in.
A life insurance policy is a contract between the policyowner and an insurer (an insurance company) to pay benefits (it could be a lump sum amount or regular payments) to the beneficiary upon the demise of the insured, in exchange for a premium. The beneficiary is the person chosen by the policyowner to receive the benefits. It is usually a spouse, offspring or loved one who would be affected by the demise of the insured. The insurance benefit may be used to ensure children complete their education, ensure mortgage or loan is settled hence continue or provide family income to meet other needs of the loved ones.
While the basic event to receive life insurance benefits is the demise of the insured, life insurance has evolved, and the benefits of life insurance can also be enjoyed while the insured is still alive. Depending on the type of policy, these benefits may include:
- Returns on invested premiums
- Tax rebates
- Permanent disability and critical illness benefits
- Return of some parts of the premium (cashback)
- Hospital cash or medical expenses benefits
- Rewards such as free health checks, gym membership etc.
A life insurance policy could cover for a designated length of time- term cover, or it could provide life-time coverage – whole life cover. The owner has the option to choose the type and the length of coverage. The rule of thumb is to choose a life insurance policy that suits the owner’s needs with a premium that is convenient.
When we are young, we don’t just think that it is necessary or in some instances, believe we can afford it. However, anyone who has dependents can’t afford not to have a life insurance policy.
Why buy life insurance you ask? Despite life’s curve balls, a life insurance policy means that the family is protected, should one die unexpectedly.
While buying life insurance may not be top of your to do list, protecting your family is not something you want to delay.