Life insurance is the core of every financial plan. But, still, people are unable to comprehend it easily because of its complexity. With proper information and a little bit of research, you can simplify the buying process and arrive at the right choice for you and your family.
If you are the only breadwinner of a family and your family completely depends on you financially, then life insurance should be your top priority. Life insurance will ensure that your dependents will not have to suffer financially, in the case of your unexpected death and can lessen financial burden when your family is dealing with a loss of loved one. Life insurance also helps your dependents to cover the costs of final expenses, outstanding debts, and mortgages, planned educational expenses and lost income.
When you decide to invest in a life insurance plan, it is imperative that you understand your financial status, your future liabilities, and commitments and then opt for a policy that can help fulfill your future needs.
Life insurance benefits are As fellows –
· Life Cover
· Long-term Savings
· Life Stage Specific Planning
· Tax saving
Paying final costs: All life insurance policy benefits can be used to pay final expenses, including funeral or cremation costs, medical bills not covered by health insurance, estate administration fees or other unpaid obligations. Even expenses such as a mortgage balance can be covered by your benefit.
Paying off debt or replacing income: Life insurance benefits can help replace your income if you pass away. Your beneficiaries can use the money to help cover essential expenses, such as paying off a mortgage or securing college educations for your children.
Inheritance: Buying a policy with a named heir as a beneficiary in order to secure an inheritance for your loved ones. The death benefit can also serve as a supplement to other inheritance funds you may wish to leave your heirs.
Paying federal or state estate taxes: Your heirs may face an estate tax upon receiving their inheritance, depending upon the state of residence and the amount. Life insurance benefits may be used to partially or completely offset this cost for your heirs. Consult with your life insurance provider or a financial professional for more information on your projected estate tax impact and life insurance benefit.
Charitable contributions: Life insurance policies can be created with your favorite charity as a named beneficiary. This can help ensure your philanthropic goals are met after you die, and that benefits are provided to your charity of choice — even if you don’t have a very large nest egg or estate.
Discussing your financial goals with a life insurance agent can help you clarify the right type of policy and benefit to meet your needs.