It pays to have a life insurance, literally. A life insurance policy holder, or more accurately the beneficiaries that are appointed, receive a substantial amount of money on the event that the insured passes away.
Most life insurance policies also reward benefits for other reasons aside from death, accidental or otherwise (except suicide). The other insured events are the diagnosis of terminal and critical illnesses, disability resulting from ill health, permanent disability, and the need for long term care.
Practically anyone can get hold of a life insurance provided he or she has the capability to pay the premium. Basically, all you have to do is find the right insurance company, determine the amount of coverage needed, and pay regularly.
Benefits of Life Insurance
The main objective of having a life insurance is to ensure that your loved ones continue to have a good quality of life through the financial support they will receive once the policyholder passes away. Life insurance coverage allows the buyer to designate one or more beneficiaries. The buyer of a policy can assign either a sole beneficiary or multiple ones.
Normally, the policyholder names the spouse as the sole beneficiary in case their children are still minor. Once they reach legal age, the children can be added as beneficiaries by simply modifying the policy.
In some cases where the beneficiaries are minor, a trustee or guardian is appointed to administer the payout. This way, the every member of the family that is named in the policy receives a set percentage of the benefits. It is also a common practice to name a contingent beneficiary in case the primary beneficiary passes away.
There are two types: revocable and irrevocable. The former can be changed anytime without permission while the latter requires the consent of the current beneficiary if the policyholder wishes to appoint a new one. The bottom line here is that once a person buys life insurance, he or she is assured that the beneficiaries will continue to live a good life even after they’re gone.
Being insured not only benefits your family in the event of your death, but it can also provide you with a long-term investment while you are still breathing. A life insurance policy allows you to cover huge expenses like providing your children with an education, building your dream home, and having enough flexibility to enjoy retirement. These are possible through different options in the policies.
Speaking of retirement, policyholders can also benefit from the assured of a steady inflow of money that they can receive from the annuities. It is like earning your keep or having an income even if you have retired.
You can also take out emergency loans when the need arises. Insurance companies allow the insured to loan money against the policy. This is especially important during times when you need a huge sum of money to pay for emergency expenses like hospitalisation.
Lastly, one of the many benefits of having life insurance is that it shapes the habit of thrift. The practice of paying a fixed amount at certain periods instills a sense of saving up for rainy days.