Insurance is designed to protect a person and the family from disasters and financial burdens. There are many kinds of insurance of which, the basic and most important is considered to be Term Life Insurance. It provides financial safety for the dependants after your death.
Since there are certain financial commitments, you need to meet throughout life and do contribute in some way to the family income. You need to provide financial security even in case of your demise -to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse.
Financial obligations could include household expenses, unsettled medical bills, mortgages, loans, business commitments, meeting the education expenses of the children, and so on.
How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? It is thumb rule or any insurance expert would recommend that you take insurance that amounts to hundred times your monthly income. It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.
As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.
- Life insurance correctly planned will on premature death provide funds to deal with mortgages and living expenses. It offers protection to the family you leave behind and serves as a cash resource.
- Life insurance can have a savings or pension component that can cater to your retirement needs.
- Some policies have riders like coverage of critical illness or double accident benefit for the extra ordinary situations. There are certain rules regarding eligibility for riders which you will need to determine clearly.
- Having a valid insurance policy is considered as financial assets which improves your credit worthiness of your family.
- Life insurance can be used for estate planning.
- There are various Term life insurance plans which has double benefits, it protects and you can get your back you survive a particular age in your life.
- If you plan correctly, Insurance protects even your business from financial loss or any liabilities in case a business partner dies.
- It can contribute towards maintaining a family’s lifestyle when one contributing partner suddenly dies.
Insurance is vital to good financial planning and security, but you would need to assess your personal risk and long-term commitments. Insurance stands as a safeguarding tool throughout the life and can be used in case of emergencies during a lifetime.