Life Is What Happens When You’re Making Other Plans
How many times do you get bugged by a telemarketer attempting to sell you this type or that type of insurance plan? In case you are anything like me, you quickly inform the individual on the other side that you are not interested and end the dialogue at the earliest opportunity. Nevertheless, if you do not have life policies in place, it might be best if you listen what the insurance professional has to offer you.
One time I read this tagline regarding life policies which I believe pretty much sums it up. It goes something similar to “You die, we pay. If you’re cashing out, your loved ones should be cashing in”. I do agree with the fact that it sounds a bit aggressive, but that is in essence what life insurance is all about. It is there to provide for your family and friends when you are no longer there and is at times also referred to as life assurance.
As with all insurance policies, life policies also have the two main role players – the insurance firm or the insurance vendor and the client or the insured. The primary difference is that with many types of insurance coverage, the insured is the individual who will be benefiting from the funds when the insurance pays out. If, for instance, you are involved in a vehicle accident – you can claim from your insurance to fix or replace your vehicle. With life policies, the individual taking out the insurance policy is not automatically the insured – and consequently the person who will take advantage of the policy.
A good example is when a husband takes out a life insurance policy. If the man dies this insurance policy will then care for his spouse and children. With life policies it is not generally specified what the cash of the insurance policy should be utilized for. The family can decide if they want to use the money to cover the funeral costs, put in a fund for training purposes or to cover their day to day bills. Keep in mind that now that the principle breadwinner of the home is not around anymore, the household still has to pay normal expenses such as the house, cars and so on and this might be really tough on only one parent’s paycheck.
The sooner you start making a monthly contribution to a life policy, the better. If you are still in your early twenties you can acquire a life policy at a very inexpensive rate. However, if you wait 10 or 30 years you will end up burdened with a very large monthly premium. This is basic mathematics – life policies should essentially reach their “ceiling” when you reach a specific age therefore the earlier you start saving, the longer the period which you have available to get to the specified value.
Life insurance, life assurance, life policies, life cover. it doesn’t matter what you want to refer to it as, just be sure that you put an action plan in place as early as possible to take care of those you love when you’re no longer able to.
For more information about life policies visit the website http://www.insurance.co.za
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