6 reasons you need a life insurance plan
Dec 07, 2022
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Getting a life insurance plan is one financial move many people are reluctant to discuss. This is because talking about life insurance policies brings our mortality to the fore, which understandably makes many uncomfortable. However, getting a life insurance policy is certainly a decision you should seriously consider.
Whether you're newlywed or you've been married for years with kids, you can never go wrong with life insurance plans as long as you have people who depend on your income. Understanding life insurance can help you make better financial plans for your loved ones.
In this post, we've highlighted important reasons why you should consider getting life insurance policies. So let's dive right in.
1. Life insurance policies can give long-term financial protection to your loved ones.
While you might have saved up, you may need more than your savings to cater for your family's needs in the long run. Therefore, having a life insurance policy can come in handy. Life insurance plans are designed to protect your family financially if something unexpected happens to you.
There are three types of life insurance policies: term life insurance, whole life insurance, and universal life insurance. Each insurance policy has its prescribed benefits. In addition, there are many reputable institutions like Assurance that provide competitive life insurance packages. So ensure you thoroughly research a list of life insurance providers within your region and carefully read through their terms and payment plans to choose a plan that suits you.
2. Replacing lost income.
Naturally, your income caters for your family’s daily needs. So after you're no more, the death benefits from your insurance policy can serve to cater for their needs. In this sense, a life insurance plan can be viewed as a replacement for lost income.
3. A life insurance policy can help your loved ones pay off debts.
Some debtors may not write off your debts upon your demise. In some cases, your estate would have to settle the liabilities attributed to your debts before being passed on to your loved ones. In such a case, your family might receive little financial benefits from your estate to sustain their lifestyle. However, with the life insurance policy benefits, they can pay some outstanding debts and keep their family's valuable assets.
4. The life insurance policy can help with funeral expenses.
These days, funeral arrangements can cost a lot. This is understandable as most families wish to send their loved ones away in a respectable ceremony. The financial stress, coupled with the emotional pain, can take a toll on your loved ones. However, a life insurance policy can help your beneficiaries settle most funeral bills with minimal stress. For example, they could use some benefits to pay for the funeral home.
5. It can help with your children's educational expenses.
Ideally, you'd want your children to get the best if something were to happen to you. You might already be putting aside money to help with their education, but making extra preparations may be a good idea. With a good insurance policy, your children can receive financial benefits to get quality education even if you're no longer around.
6. A life insurance policy provides huge sums that are tax-free.
After your demise, your dependents might need a considerable amount of money for various reasons. One way to ensure they receive it is through your life insurance benefits. This way, you can rest easy knowing they don’t have to worry about their financial state for a while since they can enjoy these lump sums down to the last dollar due to their tax-free nature.
Final thoughts
Getting a life insurance policy might not be the most intuitive move since no one anticipates their death. However, life is full of surprises, and you wouldn't want to leave your loved ones stranded if something were to happen to you unexpectedly. Therefore, getting a life insurance policy is a wise financial decision and a gesture of love toward your family.
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