We all know why life insurance is important, but many of us choose to ignore the reality of what would happen if we were to die suddenly without any proper protection. The results could be devastating for your surviving family members, leaving them with a large bill for your final expenses, or even worse, loss of the family home because they can no longer cover the mortgage.
MoneyMindz, India’s First Financial Advisory Portal advices that adults, no matter their age, should consider life insurance. It is a fact that life insurance is not always the most comfortable subject to discuss, however, every parent and working adult typically needs some type of life insurance.
Life insurance is designed to help your loved ones financially when you’re no longer around to contribute. Generally, the average age of someone who first asks about life insurance is between 35 to 55 and the premium may be a little higher by then. The longer an individual waits for a policy, the more expensive it becomes. They’re also risking an accident or illness occurring before becoming insured. Life can be sometimes cruel during the most unexpected times.
Understand life insurance
One of the biggest hurdles revolves around people simply not understanding life insurance and the fact that life insurance is not a fun topic to talk about. Money can’t replace the loss of a loved one; however, life insurance benefits can provide a cushion to help loved ones financially in the short term or long term. Life insurance is playing an important part in our national and economic welfare as well as in individual well-being. It is preserving family life where its existence is threatened by the death of a bread-earner; it provides ready funds to meet emergencies by way of loans against the value of policies.
Here are some reasons why life insurance and financial planning is a necessity, not an option:
Protect Your Family
If someone depends on you financially, then life insurance is a must. In particular, financial planning is important for parents of young children or partners who would not be able to sustain their standard of living, if you were to pass away.
Pay Off Debts
Buying life insurance to protect against debt isn’t enough. You also have to actually pay off your debt. That would be a burden to your family. If you were to pass away prior to them being paid e.g. mortgages, car loans etc.
Peace of Mind
There is no saying when exactly someone will pass away, but unfortunately at some stage it will happen. So the money cannot replace someone in your life, but having life insurance and proper financial planning can give you peace of mind, should you want to take care of your family when you are gone.
How Does It Work?
Let’s say you choose to buy a term insurance plan offering life cover of a specified amount for a given period.
The life insurance company will charge a fee for providing you a security cover. This cover is called a premium.
The money collected from all the individuals who have opted for an insurance policy is invested in a pool by insurance companies.
Thus a corpus is created. And when an unpleasant situation like death occurs, the insurer’s family gets the insured sum from this corpus.
Smart Financial Adviser, Kuber Mindz says, ‘If you’re wondering why life insurance is important, stop to consider the potentially devastating consequences of not having coverage to financially protect the people that you love.’
For more information visit www.moneymindz.com or give a missed call to 022-62116588.