Life insurance protects you and your family. The policy provides your dependants with income which comes in handy especially when you die prematurely.
Life insurance policies are not meant to provide luxury lives to those who are party to them.
It is important to note that even though life insurance savings do exist, the plans are independent hence no luxurious benefits on the part of dependants.
Some people need a life insurance cover while others don’t. As a result, you should make a wise decision as to whether your family needs a life insurance or not.
This decision is supposed to be based on factors such as; the impact that the policy will have on your family, the probability of the family affording your funeral expenses, the future family saving goals and if whether your paycheck is able to cover basic family needs for many years ahead or not.
A single person doesn’t need life insurance. The same case applies to those who have no dependants. This is because the policy is mostly meant to cover the life of dependants and if they don’t exist then the policy will be of no use even if you took one.
Those people who don’t undertake a life insurance and may be they are single or have no dependants should establish low-risk savings plan to cover funeral costs because they matter to them the most.
Money that should have been used in paying insurance premiums is then invested.
Advantages of life insurance:
• Access to Cash- Life insurance cash is withdrawal for education funding, emergencies, paying policy premiums and investing in business opportunities.
• Long-term Financial Security- Life insurance policies build cash funds that last for decades. There are also multiple ways in which you or your dependants can access these funds.
For example, you can continue with the policy to protect your family members or convert them into annuities that will give you some cash values.
• Asset Protection- Life insurance offsets the impact of real estate taxes after your death. This prevents family members from selling some of your assets to fund incurred costs.As a result, family members easily achieve their goals after your death.
• Flexibility with Less Restriction- With life assurance policies, there is a nice opportunity for members to access accumulated funds. Unlike other assets, there are no penalties and minimal contribution requirements associated with life insurance funds.
• Consistent and Safe Accumulation- Life insurance policies guarantee permanent cash values. This makes it easier for you to access assets that you are accumulating during your lifetime.
• Protected Insurability- The policy provides life insurance coverage throughout your life. This applies only when you have paid the required insurance premiums and followed policy guidelines of your insurer. It does not matter whether personal or health situations change, because you are assured of insurability with permanent life insurance policy.