Life insurance is considered to be the most basic and most important kind of insurance there is, because it provides for the family (the dependents) after your death.
Through life, there are many different financial commitments you need to meet and also contribute to the family income.Even if you die, you must be able to protect dependant parents, secure the home and help the family with expenses for a while.It will also provide you peace of mind for any uncertainties in life.
Financial commitments often include mortgage, funeral expenses, unsettled medical bills, college expenses for the children and many other things.How much life insurance a person will need varies depends on things like sources of income, debts, your lifestyle and how many dependants there are.
Insurance advisers often recommend that a life insurance should be between 5 and 10 times your annual income.Every personÂ´s insurance needs are different, it is a good idea to sit down with an expert and go through what kind of insurance plan would benefit you most.
Here are 10 key reasons why it is a good idea to have life insurance.
#1.If it is correctly planned, it will provide funds to deal with mortgages and living expenses.It also serves as a cash resource and offers protection to your family.
#2.Depending on which country you live, it can provide tax free cash that can be utilized to pay for funeral and death duties, the estate, personal and business expenses.Every country has itÂ´s own laws, so contact an insurance expert to be absolutely sure how things work where you live.
#3.It can provide for you during retirement, some policies have a pension or savings component.
#4.Some policies will cover critical illness for the children and spouse as well.There are certain rules regarding eligibility for this, you need to determine them clearly with the insurance expert.
#5.A valid policy will improve your credit rating when you need a business loan or a home loan.It is considered as financial assets.
#6.The cash value and benefits are exempt from creditors in case of bankruptcy.
#7.It can be planned to cover your funeral expenses.
#8.It protects you and you can also get your money back during strategic points of your life.
#9.If your business partner dies, the life insurance will protect you from any liabilities or financial loss.
#10.If one contributing partner dies, the policy can contribute towards maintaining the familyÂ´s life style.
Good financial planning and security is not complete without a good life insurance policy, but you need to assess your long term commitments and personal risk.Always check with a insurance expert where you live because there are different rules depending on where in the world you live.