Purchasing life insurance is one of the most important financial decisions that you can make. But why is it so vital?
Well, no matter how much you earn right now, you do not know what the future holds.
If you are the breadwinner and you unexpectedly pass away, it could result in devastating consequences to your loved ones, affecting their ability to pay off debts, household expenses, or maintain their standard of living.
It is high time that you secure your loved one's financial future by getting a life insurance policy. Here are the nine top reasons why you should get it:
Get more financial security
This is one of the most important aspects of life insurance that you need to factor. If your family is dependent on you, the last thing that you want to do is to let them down, right?
Whether it means replacing a lost income, making sure that your spouse gets financial security, or paying for your kids' college education, life insurance saves the day by helping your surviving dependents.
Take care of pending debts
If something happens to you, your debts won't disappear.
Let's say, you and your spouse have co-signed for your loan mortgage. When you pass away, your spouse will be the one responsible for the loan payment. The other outcome would also mean that creditors will try to get their hands on your property.
According to ServicePros Life Insurance NZ, when a crisis happens, you don't want your family to deal with pending debts and other financial liabilities. Whether it's a pre-existing auto loan, home loan, personal loan, credit card loan.
But with the right life insurance policy, everything is well taken care of. That way, you're sure that your loved ones are free of any lingering financial liabilities.
Helps pay estate taxes
Most real estate taxes could be steep. When you die, your heirs could face inheritance and estate taxes along with the assets that they receive.
If you're worried about your loved ones getting a huge tax bill, a life insurance policy will help you cover these costs.
Having life insurance in place is crucial to avoid jeopardizing your money and assets built for retirement. Using life insurance for this purpose is particularly common in large estates.
Cover final expenses
Even basic funeral expenses can be costly and can amount to several thousands of dollars. While it's possible to pre-pay for a funeral, some people do not think that far ahead.
Pre-paying your funeral means that you already have everything in place when you die. But the thing is, some risks come with pre-payment.
Life insurance can provide you and your loved ones with more guarantee, lifting any financial burden off you.
Build cash value
Term life insurance is a type of life insurance that stays with for a specific period. Another option, known as whole life insurance, provides you with permanent coverage that will only end if you decide to cancel the policy.
Moreover, whole life insurance allows you to build up cash value, a very attractive prospect for a lot of people. You might need this if you encounter any financial emergency down the road.
Meet your long-term goals
Life insurance also allows you to reach your long-term goals like planning for your retirement or purchasing a new home.
It offers a wide array of investment options that come with a wide range of insurance policies. Some policies will be tied to particular investment products, which could pay for dividends based on performance.
If you want a policy that's insurance-linked, then carefully read the fine print first to fully assess potential risks and returns.
Supplement your retirement
With a life insurance plan, you're sure to have a regular stream of income every month.
Placing your money in an annuity is like a pension plan. You could enjoy a steady amount of income each month after your retirement.
One of the main reasons why a lot of people don't get life insurance is the cost. But the truth is that you can compare life insurance plans to pick one that you can afford.
Moreover, the younger and healthier you are, the lower your premiums can possibly be ‒ unless you have any pre-existing health condition. Mind you, several insurance coverages run for as low as a $1 daily.
Provides peace of mind
While it's true that no amount of money could ever replace a person, a life insurance policy could provide the protection and security you need for all kinds of uncertainties in life.
It helps you and your loved ones prepare for any kind of eventuality. Even with a small policy in place, you could find yourself sleeping a little bit easier at night knowing that your loved ones are protected, no matter what happens to you.
Life insurance protects you and your loved ones from an unknowable future. Plus, it is also handy if something untoward happens to you. Hence, there is no better way to get insured but now.