Is Life Insurance Really Worth It
Define Life Insurance in simple terms: I pay the bank a fixed amount of money while I’m still breathing; they pay my family as soon as I stop breathing, Basic, understandable, callous and yet necessary. It is way of insuring that my family does not end up in financial crisis just because I their bread winner passed away. Death and life is something out of my control, but their well being is something that I can take care of up to some extend, then why not opt for it? SO how do you go about? Basically in life insurance policies, there are four characters on the main stage; the life insurance company, the policy owner, the insured individual ad the beneficiary. Now it is not necessary that we require different actors for each of these roles; the last three can be played by the same actor, it doesn’t’ make much of a difference. Now the insurance company makes a pledge to the policy owner that on the time of the death of the insured, they will pay benefit to the policy’s beneficiary.
In return for that the policy owner needs to pay certain amount f money on timely intervals to the company to secure the policy. A widely believed misconception is that the lie insurance works only if the insured dies; it is not so. There are different policies making various offers; it can be used to provide for childcare or cover any health and medical bills, for your estate need protection, to cover your home mortgage, funding your retirement, protecting your business interests and so on. The nest question is Do you really, really need it? None of us knows what waits for us around the next corner or what fate has written for us; so why not be safe than sorry? Agreed that it is expensive and takes a major chunk out of your money flow but if you consider it in the big picture, it has a lot of advantages in the long run! One of the good thing about life insurance policies is that the younger and healthier you are, the lesser you would have to pay because these insurance companies literally hate paying up so they like having their insured individuals breathing and moving around.
They certainly do not begrudge you your healthy life!Now the next question is how much Life Insurance Do you require? Just keep one thing in mind that your death benefit should at least be 8 to 12 time your annual income but other factors to keep under consideration are the size of your family, other sources of income supporting your spending, number or individuals dependent on you financially, whether your spouse has any source of earning currently or in the nearer future, any other death benefit you might receive from the Social Services and any special need that you need to be taken are of such as college funds, daughters dowry and etc.
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