What is more inevitable than paying taxes? Death! It is the fact of life that every human being would need to face and accept one day.
Keeping the morbid truth aside, one should be prepared, especially when they have loved ones to look and care for. The best way to do just that is to apply for a life insurance policy.
The reason is simple –
It would act like a shield that would keep your loved ones from missing the income especially if you are the sole breadwinner in the family.
Do you need a life insurance policy?
Be sure to keep in mind that:
· Your financial and family situation will be the primary factors that would drive you to apply for a life insurance policy.
· Choose a policy whose payout amount would be enough to sustain your loved ones after your accidental, natural or illness related death.
Now, it is natural for people to shy away from applying for a life insurance policy if they are leading the life of a single individual. It is okay to do so when no one is depending on you and you have enough money to cover your expenses and your debts. In the end, why take on a financial liability like a life insurance policy when you are single and you won’t be able to reap its benefits?
On the other hand, if you are a family person but have enough financial assets that could provide for your loved ones even after your demise, it would be your choice whether you want to apply for a policy or not.
Now, people who are the primary earning member of their family, have debts that outweigh their assets, applying for a say, 500,000 life insurance policy or more is a winner’s move!
Does your age matter in this case?
It is true that there are some aggressive life insurance agents out there that tout that you are not eligible for a policy because of your age. You should keep in mind that – this is not at all true!
You are eligible to apply for a policy irrespective of your age. Sure, if you had done the same when you were young, the premium amount would have been more affordable.
Keep this simple fact in mind –
You should go and apply for a life insurance policy if you and your family need it.
Should you consider your life insurance policy as an investment?
Well, the answer is no!
You should remember that a life insurance policy should not be looked at as an investment vehicle.
A life insurance policy is like an index fund which is unlikely to give you better returns. Even after this, if you choose to ‘invest’ in a life insurance policy since you lack the discipline to invest regularly, choose a policy that has high ‘cash-value’.
It is very important for you to be clear about the type of life insurance policy and the cover sum it will provide to your loved ones when you are applying for one. Furthermore, you can buy a policy on your own but to make a more informed decision, you should seek the help of an insurance agent.
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