A financial planner can explain it the best if we really need life insurance? Life insurance can be considered a contract between an individual (the insured) and a life insurance company. In exchange for the premiums paid, the insurer promises to provide benefits, known as the death benefit, at some point in the future if anything were to happen to the breadwinner.
MAJOR REASONS BY A FINANCIAL PLANNER:
FAMILY’S FINANCIAL WELLBEING
Insurance is a way to help protect your family’s financial well-being. In most cases, your life insurance policy will stay in effect even if you lose your income or change jobs. If the family’s breadwinner dies prematurely, the life insurance can provide home payments, children’s education, and miscellaneous living expenses until the survivors can support themselves.
FINANCIAL SUPPORT AS PER FINANCIAL PLANNER
If you have children, a spouse, or family members that rely on your income to survive, life insurance can help support them financially if the worst happens. If the primary earnings of your household come from your income and there are no other sources of funds available, you will want to make sure that those dependents are being cared for in some way.
PROVIDE LIQUIDITY AS PER THE FINANCIAL PLANNER
Life insurance can provide you with the opportunity to raise cash from the insurance benefits when you require funds, either for an individual purpose or perhaps for business needs. Generally, there is no restriction on how you use the proceeds from your life insurance policy.
PAY OFF LOANS
If you have outstanding loans, life insurance can help pay them off upon your death. Your spouse or family will not be responsible for repaying these loans, and they’ll also benefit from the additional cash flow. In addition, it is easy to handle their loan obligations after you’re gone.
IT IS INEXPENSIVE TO MAINTAIN
Life insurance is one of the least expensive ways to provide financial security for your family. In most cases, costs can be minimal in comparison to other financial instruments. You may also want to consider that premiums are fixed when you purchase a policy and do not change during the policy term.
There are several types of life insurance policies that you can purchase. They vary in terms of coverage, exclusions, premiums, and the length of time they remain in effect. With proper planning, it’s possible to custom-design a policy to meet your specific needs. This is the best feature as per the financial planner.
USE AS AN INVESTMENT
Most financial planner say the cost of life insurance as a percentage of an individual’s total assets has fallen as more people have begun to see it as an investment. In addition to providing financial security for your family, it can provide a source of steady, additional cash flow. You can often choose an investment strategy that best suits your needs and goals.
Life insurance is integral to protecting your family’s financial well-being. It is never too early to initiate thinking about life insurance as the best financial advisors say. Whether you are a single individual or have dependents, it can play a vital role in our financial planning. Hence, according to financial planner, life insurance has its benefits and relevance at all times in our life.