Life insurance is a required investment since it provides financial security to your loved ones in case of your untimely demise. Since it offers a guarantee of the beneficiaries receiving the entire coverage amount, every family member can buy a policy of their own.
Besides providing replacement income in the event of the policy holder's death, a life insurance policy can also act as an investment option which can serve as a person's pension plan in the future. A person who has a life term insurance policy will be able to do the following:
1. A policy holder can provide financial security for his/her family in the event of his/her untimely or unexpected death. When a policy holder dies, death benefits in the form of cash will be given to his/her designated beneficiaries. This cash will serve as the income that will be lost with the death of the policy holder. Depending on the amount purchased by the policy holder, the coverage may be enough to shoulder the needs of the surviving family for a number of years.
2. A policy holder may protect his/her home mortgage. The cash that will be given to the beneficiaries may be substantial enough to cover any existing mortgages left by the policy holder. A policy holder can assure that his/her family will still have a roof over their heads even if he/she dies.
3. A life insurance policy will also allow a policy holder to take care of estate planning expenses and costs. Even if it is a cheap life insurance policy, the amount of cash benefit that a policy holder can get from it may be enough to at least subsidize the cost of estate lawyers who will be responsible for making sure that the policy holder's assets are distributed to their respective heirs.
4. Depending on the type of policy, a policy holder may also benefit from his/her policy through a retirement savings option which he/she may utilize even if he/she is still alive. A permanent life policy allows such investments to happen and the policy holder may take out the equivalent cash value which he/she can use during his/her retirement years. Term life insurance quotes do not include an investment option and are therefore significantly less expensive than those of a permanent life policy.
If the breadwinner were to die young but has an insurance policy, this will take care of the financial needs of his dependents. The decision whether the coverage is large or small really depends on the basic needs of the family that can be divided into three. The first need is the immediate or pressing need that will arise as soon as the breadwinner dies. This could be anything like paying for hospital expenses, funeral expenses and miscellaneous that are due to be paid immediately.
Recurring needs is the second basic need and this refers to the daily expenses on food, clothing, house repairs etc. Future needs of the family constitute the last and final basic need. This could be the cost of providing a pension for your spouse on retirement, sending kids to school / college or even helping children start a business on their own. Most insurance experts suggest that people multiply their current salary by 10-15 times to arrive at an adequate coverage amount.
With the many insurance policies and companies doing business, it is easy for a novice to get cheated by being sold the wrong policy by a fraudulent company. So, how can you avoid this and buy insurance only from a reliable firm with a sold reputation and a good credit rating? You can ask the opinion of those you know who have already bought insurance. You can request life insurance online quotes and then check the company's rating from raters like 'A. M. Best'. You can visit insurance forums, chat rooms and read insurance blogs that will discuss different policies, the problems people experienced etc. In this way, you can get a good policy.
A life insurance policy will be able to protect the policy holder's family in the event of the policy holder's death, however; it is important to first check the reliability of the insurance company behind the policy. So be cautious in purchasing your first life insurance policy and always read the fine print. .
If you want to find out more information about life insurance no medical, you should visit David Livingston's site today where he shares a lot more information on how to get the best policy to suit your needs. Visit now at http://www.equote.com.
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