Life insurance is an effective means of preparing your family and protecting them in case a tragedy strikes. It is a way of preparing for the future. Sadly, many people do not choose this option. Many people believe that getting life insurance is a waste of time. A survey shows that almost half of American adults do not have life insurance at all. The common reason for not getting insurance is the expensive premium. In reality, a life insurance policy is not that costly at all. It has many benefits as well.
1. Gives Dependents a Secure Future
Experts believe that an insurance plan equivalent to about seven to 10 times the individual’s yearly income would be ideal. This policy would leave dependents set for whatever expenses they may need after the individual’s death. A policy like this could cover the costs of the children’s college education. In addition, the children will not need to apply for student loans anymore.
There are severe consequences for dependents if the insurance coverage is insufficient. The surviving family members would have a difficult time with their daily expenses. A life insurance plan helps in planning long-term well-being and health. This provides the breadwinner peace of mind. When the time comes, the people left behind will be financially secure.
An individual with dependents must have life insurance, much like a savings account. The money from the policy’s death benefit can help the beneficiary. It can cover or assist in different important financial obligations, like college payments, funeral costs, and living expenses.
2. It Can Clear Final Expenses
Paying for a loved one’s funeral can be a burden for the surviving family members. A life insurance policy can take care of the costs through final expenses. These expenses include the costs of a person’s funeral arrangements. As a result, loved ones will not need to take money from their own bank accounts or apply for loans. There are insurance companies offering final expense policies. These specific policies have low monthly premiums and low coverage amounts.
Life insurance has a cash surrender or cash value. This means it can build cash value as the years pass. In addition, it can provide a death benefit to the dependents. This type of insurance is like a tuition or retirement savings plan. The policy owner can use the money for whatever he or she wishes. The money may go to college tuition, a home down payment, or a new car.
3. Provides Coverage for Terminal and Chronic Illnesses
This type of insurance can have riders. These can add to the current policy to adjust or even enhance the coverage. Accelerated benefits riders allow the policyholder to tap into the death benefit during specific situations. A policy owner who has a terminal condition can use the death benefit to care for the policyholder and other necessary expenses. A life insurance hybrid policy has long-term benefits to sustain services for long-term care. This is something an individual needs later on. The individual can choose to have this benefit or save it for the beneficiary upon death.
4. Adds to Retirement Savings
The cash value from a life insurance policy can have cash value on top of death benefits. The cash value becomes bigger over time. The policy owner can then use this for certain expenses like home or car payments. Moreover, the collected money can also contribute to retirement funds. This type of insurance can increase one’s pension. It does so by supplementing the income of the surviving spouse. It can also add to a trust fund, allowing the policyholder to pass the funds to the heirs outside of the estate.
5. It Is Affordable
Many people stay away from the topic of life insurance. They often think it is too expensive. Breadwinners think about paying more urgent needs such as hospital bills, medications, or education. This creates a barrier to owning life insurance. For example, a 30-year-old individual, who gets a 20-year life insurance policy with coverage worth $250,000, will pay only $13 a month. This is a better view of this policy that might convince more people to get this type of insurance.
An insurance agent can help the prospective policy buyer calculate how much a monthly premium should be. The amount is often based on the client’s earnings and expenses per month. It will be an amount that will be convenient for the client. It will not hinder any basic expenses.
A Life Insurance Policy Can Benefit You in So Many Ways
Many people think that getting a life insurance policy is exclusive to the wealthy. This is not true at all. In fact, it is an affordable and effective way for a breadwinner to still provide for the family after passing away. This type of insurance can also help with the policy owner’s retirement, long-term care, and final expenses. Talking to a credible and licensed insurance agent can get you started on your life insurance policy.
