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Why Do You Need Life
Insurance?
Life insurance
protects protects your loved ones such as children and spouse from the
financial consequences of your death.
Your life
insurance provides financial support to the beneficiaries named in your
policy. The types of protection include the following.
1) Income
Protection: The proceeds from the life insurance would ensure the
same standard of living even after you.
2) Payment of Debts:
Typically people have loans such as home mortgage. A mortgage insurance
could be used to pay for the home loans in the event of the death of
the policy holder.
3) Business
Partnership agreements: In a partnership business, the partners
typically insurance the lives of the partners. The payments from such a
policy would be used to buy the deceased person's share of the business
from the family.
Life Insurance may also be used as a vehicle for investing. Some forms
of insurance policies provided payouts in the form of dividends and a
maturity payout. Such dividends and payouts are not taxed until the
money is with drawn. So these payments are tax deferred.
Types of
Life Insurance Policies:
a) Term Insurance: The policy holder is covered for a specific
time period as specified in the insurance contract. The benefits are
paid only if the person dies within that time frame. No cash is
refunded after the end of the time period.
b) Cash Value Policies: These policies keep adding money
to the policy holder's account by issuing dividends etc. The policy
holder may with drawn this money only by canceling the policy. In the
event of the death, only the death benefits of the policy are paid. The
accrued cash is not paid.
c) Annuities: These types of policies pay the benefits during
the life of the policy holder rather than at the death.
How much
Life Insurance Should You Buy? Coming Soon.
How to
Save Money on Life Insurance ? Coming Soon.
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