6 Reasons You Should Get a Life Insurance Policy

Being financially ready allows you to prepare for the different responsibilities that you need to fulfill in life. Some of the goals that you need to anticipate are buying a home, saving up for retirement, and paying for your children’s education. Having enough and the right resources to address these needs allows you to sail through some of the biggest milestones you can have in life.

In addition to these planned expenses, saving up for unplanned ones is a great idea. After all, you don’t always know when you’ll need money for sudden home repairs, costly medical expenses, and even death. Being caught off guard with these responsibilities can negatively impact your savings and even affect your loved ones’ financial situation.

One thing you can do to ensure that you or your loved ones will not be devastated by any unplanned expenses is to get life insurance. Whether you’re young and single, married, or raising children, you have several reasons to get a life insurance policy for yourself

Life insurance is a type of contract that you have with an insurer. This policy guarantees that the insurer pays a lump sum to your beneficiaries in exchange for your premium payments after your death. 

The speed and depth of the downturn seems more severe because the constraints are physical, not financial - production and consumption of goods was on-going and the only hindrance was the difficulty in financing them. On the other hand, currently, no matter how much money you have, you just cannot purchase goods and services because no one is offering them.

 

The main purpose of getting a life insurance policy for yourself is to help your loved ones even after you’ve passed. This becomes possible through the death benefit released by your insurer once this unfortunate time comes. No matter how big or small, this sum of money can be used by your beneficiaries for the following purposes:

Replace Lost Income

As a part of a household, you might cover a portion or even all of your family’s expenses using your income. These expenses can include housing, utilities, food, education, and clothing.

In the unfortunate event of your death, your loved ones may not have enough income to cover these expenses by themselves. Losing your contribution suddenly may disrupt their budget and force them to sacrifice some of their needs or even get in debt.

If you have a life insurance and savings plan, you wouldn’t have to worry about leaving your loved ones without any way to support themselves financially in case of your death. Your insurance plan, specifically your death benefit, can fill up the income gap and be used to cover your beneficiaries’ living expenses.

Pay Off Debts

Some of your debts, such as personal loans and credit card bills, don’t simply go away when you die. This means that your loved ones will be left with the responsibility of paying them off using money from your account or their own resources.

You can avoid this scenario if you have a life insurance policy. If you leave any debt behind at the time of your death, your beneficiaries won’t have to worry about how to pay them. They can use your death benefit to address this financial responsibility.

Cover Funeral Expenses

Another reason to get a life insurance policy is to cover your funeral expenses once you pass away. As you might know, funerals can be expensive. Taking care of this financial responsibility while mourning your loss may be too stressful for your family.

To help ease the burden, your loved ones can use a part of your death benefit to cover your funeral costs. This way, they can mourn and give you a proper goodbye without spending their money.

Pay for Education Expenses

If you have children or younger siblings, you might be paying for all or a part of their education expenses. In the unfortunate event of your passing, they may be left without enough support to continue their education.

You can avoid this by getting a life insurance plan from a reputable company. When you pass away, your family can use your death benefit to cover your child or sibling’s education.

They can also use it to build an education fund, which can be used to pay for a family member’s college education. This can help your child or sibling secure a bright future even after you’ve passed.

Protect a Business

 

If you are a business owner, you are responsible for ensuring that your partners and employees will not be left directionless in the case of your sudden departure. Fortunately, your life insurance can provide your business with a cash boost that can help keep it afloat while your business partners figure out how to continue running the company.

You can also use life insurance policies to create a buy/sell agreement with your business partners. This arrangement requires each partner to get a life insurance policy that equals that person’s share in the business. In case one of the partners passes away, the surviving party can claim the death benefit and use the cash to buy out the deceased partner’s share of the business.

Inheritance

One of the greatest reasons to get a life insurance policy is to ensure the success of the loved ones you will be leaving behind when you pass. By getting a life insurance plan, you can pass on a considerable sum of money to your beneficiaries, which they can use to build a bright future for themselves.

This is a great way of leaving an inheritance to your family members because life insurance is less vulnerable to value fluctuation. Additionally, your death benefit is not likely to be taxed before being distributed to your beneficiaries.

When setting up your life insurance policy, you can make a list of beneficiaries and indicate how the inheritance should be distributed between them. This way, there wouldn’t be any problem when the time to allocate your inheritance comes.

Having a life insurance plan helps you prepare for unexpected events that can happen in life. To make sure that you can enjoy all the benefits of a life insurance policy listed above, you should choose a reputable insurance company to work with.

One of the leading life insurance companies that you can choose is Allianz PNB Life. We always think about your future and strive to provide you with solutions that will help you reach your goals. For more information on how we can assist you, reach out to us.