The Importance of Life Insurance
posted in Article |The first question most people ask is why do we need life insurance?
Life insurance can provide you with peace of mind knowing that if something happens to you, your loved ones won?t be left with a legacy of debt, final taxes or other money worries. Life insurance is there to protect and provide for your family when you are no longer able to. If your children are young, they will need support for many years. Without insurance they will lose the standard of living that they are used to. If they are older, they may still need help with education, starting a family of their own or starting a business.
If you have taken on a mortgage you should consider buying term insurance to cover the mortgage principal. That way, if the worst happened, your family could at least keep the roof over its head. And by purchasing the insurance personally as opposed to taking the mortgage insurance option offered by the bank or mortgage company, that money would be placed directly into your family’s hands. A personal insurance policy will also offer more flexibility and features that you can use to plan for your future needs.
It is important to have your life insurance tailored to your needs and that it can be revised as your needs change.
Some questions you should ask in order to choose the right type of policy are:
- Will the policy meet my current needs?
- Will the policy provide the flexibility to meet my future needs?
- What does the policy cost — both current and expected lifetime costs?
- Is the provider established and financially strong?
- Will the company back its guarantees?
There are two types of insurance to choose from term insurance or permanent insurance.
Term Life Insurance
If you’re looking for basic insurance coverage for a specific period of time, term insurance is a good place to start. It’s a cost-effective and simple plan, with some flexibility to adapt to your long-term goals. Over time, your needs may change.
Term life insurance can evolve with your needs by providing options to lengthen your coverage period or even to transfer to a permanent life insurance solution.
Permanent Life Insurance
If your financial objectives include more than basic insurance coverage, you may benefit from this option?s added investment potential. Permanent insurance solutions allow you to insure against the unexpected while increasing the value of your investment over time. Permanent plans are flexible; and can be tailored to the level of investment potential and insurance coverage to meet your personal financial goals. You can also select a plan that gradually minimizes insurance coverage so you can maximize your policy’s investment potential.
