Who needs Life Insurance?|
Again, life insurance is an income protection. Thus, you need to insure the life of the breadwinner.
Life insurance is a necessity for the husband whose wife is not working. This is because the whole family depends on the money he brings home. Should he demise, the family will suffer the loss of that money, thus the insurance proceeds will help the family cover for this eventuality.
If both the husband and the wife works, the need for an insurance plan is somewhat diminished. This is because if one of them dies, the other can take care of the financial needs of their family.
However, even if the husband and the wife works, during the existence of a mortgage or children’s education, loss of ones income may seriously deteriorate the financial condition of the family. Thus, they need an insurance to protect their family during the existence of mortgage or children’s education.
If you are single and you have no dependent, you may not need life insurance at all. This is because there is no one who suffers from your lost. Well, you parents will suffer emotional loss but financial loss is doubtful. If you get insurance as an investment, how do you claim it if you die?
Children, just like single individuals, do not need life insurance. First, they have no income to protect. Secondly, if you are getting insurance as an investment, the amount of insurance you will get right now may not be sufficient for the child’s needs twenty to thirty years from now. Inflation will just eat up the investment your put in.
Types of Life Insurance
The two major types of life insurance you may consider are Term Life Insurance and Whole Life Insurance.
Term life insurance protects your income for a certain period. You may want a plan for five, ten, fifteen, twenty, twenty-five or thirty years.
Term life insurance is specifically good for those people who want to protect their income during the existence of mortgage, children’s education or loans. If both the husband and the wife work, you may not need insurance after you have paid off your obligations.
Premiums for term life insurance may prove to be cheaper than that of whole life insurance. However, when you renew your term insurance, say after 10 years, you may need to pay bigger premium. Moreover, if you continue to renew your term insurance every ten years, in the end you would have paid hugely.
If you want to protect your family for a long time, whole life insurance is what you need.
Whole life insurance covers your family from financial loss until 100 years and beyond. Of course, this is, should you live more than 100 years. Whole life insurance covers you and your family’s financial status almost permanently.
In addition, the best thing about whole life insurance is that it earns cash value. When you already accumulate enough cash value, should you need money while still living, you may take out a loan of up to ninety-percent of your cash value. Thus, you enjoy your money while you are still living.
There is also that possibility of getting dividends but this is not written in stone, because dividends depend on the performance of your insurance company.
Before you embark on getting a insurance, assess yourself and your financial condition if you really need an insurance coverage. Insurance agents may be able to find a hundred and one reasons to sell you a policy, but you need to know if you really need one and if you really want an insurance policy. I hope this article may help you in the process.