These days, it seems there are insurance policies available for just about everything: car insurance, home insurance, travel insurance, pet insurance, life insurance – the list appears to be endless. Some types of insurance, such as car insurance, are required by law if you intend to drive on the public highway, but for most people other forms of insurance are an optional extra.
However, it’s important to note that arranging insurance policies for other lifestyle items can provide you with peace of mind should something unfortunate happen. For example, taking out home-contents insurance can help cover the cost of replacing your household goods, while pet insurance can cover the cost of veterinary bills and treatments. But perhaps one of the most important ‘optional’ insurances you should consider is life insurance.
Whilst no one likes to think about death, life insurance – sometimes known as life assurance or term assurance – is a policy which pays a lump sum in the event of the policyholder’s death, helping to protect loved ones and dependents against financial burden. Coming to terms with the loss of a loved one is never an easy thing to do, and the added financial burden can make it increasingly difficult to cope. However, a life insurance policy can help cover such costs as mortgage repayments, salary replacement and childcare costs, paying off debts or even providing for future education for the kids. Moreover it can help ensure your family can maintain the standard of living to which they were accustomed to.
Life insurance comes in various forms, the most common being level term, decreasing term, critical illness and family income benefit policies. Most are available as both single and joint life policies, with most policies including benefits such as paying out on the diagnosis of a terminal illness. If you’re considering life insurance now, or in the future, it’s important to understand what each type of policy provides.
- Level term insurance is the most common form of life insurance and is designed to pay out a lump sum of money in the event of the policyholder’s death. The policy runs for a fixed term, normally a minimum of 10 years, and the sum assured is guaranteed, and remains unchanged throughout the life of the policy.
- Decreasing term life insurance is also known as mortgage protection cover and is regularly used to protect capital and interest payments on a mortgage. The sum assured decreases during the duration of the policy.
- Critical Illness insurance pays a lump sum if you are diagnosed with a specified illness, or suffer loss of limb and can be added to term insurance policies. The sum paid out by this policy can be used for any purpose.
- Family Income Benefit insurance pays a regular tax free income for your dependants throughout the remainder of the policy term. Payouts on this type of life insurance can be structured to correspond with changes in inflation, although benefits usually remain constant.
With the cost of life insurance premiums plummeting in recent years due to improved life expectancy and increased competition between policy providers, arranging a life insurance policy needn’t mean breaking the bank or compromising on cover. Financial comparison sites can help you to find the best deals on life insurance – from premium prices to levels of cover – and with only a few clicks, you can insure and safeguard your family’s future for when you’re no longer around.
Andrew Regan
http://www.articlesbase.com/insurance-articles/life-insurance-do-you-really-need-it-120720.html
#1 by Justin on March 14, 2010 - 3:59 am
Do I really need to take a Life Insurance Policy?
I have been asked to take a life insurance policy to ensure the well being of my dependants. I have a feeling that I do not really need it because I have enough to go round for them. I need to know if taking a life insurance policy is important.
#2 by Salome on March 14, 2010 - 9:01 am
Before we answer your question let us look at what Life Insurance is all about:
What is Life Insurance
Life insurance is a policy that you can enter with your insurance company, which promises a certain amount to your beneficiary(ies) in the event of your death. Usually, a spouse will name the other spouse as well as their children as beneficiaries of the policy. As part of the agreement with life insurance, your insurance policy will be a monetary value, that you will in return, pay a monthly premium for. Premiums usually depend on your age, gender, occupation, medical history and other factors.
There are other types of life insurance that may provide benefits for you and for your family while you are still living. These policies can accrue a cash value on a tax-deferred basis and can be used for future needs such as retirement or your child’s education.
Do You Need Life Insurance
Earning an income allows you and your family to do many things. It pays for your mortgage, buys cars, food, clothing, vacations and many other luxuries that you and your family enjoy. However, certain situations can cause you to lose your income, and those who depend on you also depend on your income. If any of the following statements about you and your family are true, then it is probably a good idea for you to consider life insurance.
1) You are married and have a spouse.
2) You have children who are dependent on you.
3) You have a parent or relative who is aging, or disable and depends on you.
4) You have a loved one in your life that you wish to provide for.
5) Your 401K retirement plan, pension and savings aren’t enough to insure your loved one’s future.
What Are Your Life Insurance Options
For more information visit http://www.insurancetipsarena.com/27343.php
References :
http://www.insurancetipsarena.com/27343.php
#3 by William on March 14, 2010 - 9:03 am
Only YOU can make that judgment. The purpose of life insurance is to replace your lost income (should you die) for those who financially depend on you.
References :
#4 by Mr. Prefect on March 14, 2010 - 9:05 am
If your demise entails that your dependents will not be able to live comfortably as they are accustomed, then you need insurance. If you have set them up for life, a business to go into, a pot of gold at the end, never to have to say no, then they are in great shape.
Unfortunately these types of people are few and far between. If your spouse will have to go to work, and kids will not have a place to live, with no future money for college, cars, living, if you die, then look into life insurance.
References :
#5 by Tim on March 14, 2010 - 9:07 am
lifeinsurance.awardspace.info – try this one. I have their insurance and, as remember, they can provide such a service.
References :
#6 by Brook on March 14, 2010 - 9:09 am
I would suggest you take out a term life policy that would pay off any debts, plus provide enough income to get your kids through school and out of the house and replace your income for the years in which they would still be there. My personal theory is you take out a term policy for around 100,000 per child with return of premium on it whenever you have a new baby, then you get all the money back if you don’t pass away so all you really spent was whatever interest that 7000 or so dollars would have made you over the period. Do the same for mortgages or loans for cars, and just figure it as part of the cost of ownership. Any more than that is unnecessary and can frankly be better spent in planning for retirement. You might also want to take out a smaller policy for burial and funeral expenses that does not expire, like 15 or 20 thousand dollars as a Universal Life policy, they tend to be very affordable when you are younger.
References :
I am a licensed insurance agent in Tennessee with appointment to multiple companies.
http://www.lifeplanningtn.com