What is Life Insurance?
In today’s world most of us are aware of what Life Insurance means. Life Insurance in a nutshell means a policy that people buy from Insurance Company, which can be the basis of protection and financial stability of the family in case of any unfortunate eventuality (death, disablement). Simply put, Life Insurance is a Protection Tool for the earning member of a family whereby if anything happens to this particular person and his earning stops, then the family should not suffer from financial crisis.
Life Insurance is an Insurance of a person’s life. So, if he were to die, his family would receive an amount of money called the Sum Assured, which would help the family to take care of the financial crisis which would arise from the sudden inflow in income. To get this benefit, he would have to pay a certain amount of money called Life Insurance Premium to the Insurance Company every year as per the contract.
But, who needs Life Insurance?
Buying life insurance doesn't make sense for everyone. If you have no dependents and enough assets to cover your debts and the cost of dying (funeral, lawyer's fees, etc.), then insurance is an unnecessary cost for you. Also, if you do have dependents and you have enough assets to provide for them after your death by investments, property, etc., then you may not need life insurance.
However if you fall under any of the following category, then you definitely need insurance:
If you have people financially dependent on you or if you are the sole earning member for your family, then you need Life Insurance
If you have any loan or debt that outweighs your assets, then you need Life Insurance.
If you are staying at home and providing your family with such services as child care, cooking, and cleaning, you need Life Insurance
If both you and your spouse are earning and you would like to protect a surviving spouse against the possibility of the couple's retirement savings being depleted by unexpected medical expenses then you need Life Insurance
If you are a parent and you need to protect your child’s future against any unforeseen events for your child’s security, then you need Life Insurance
If you have a lot of wealth and assets and you would not like the same to run down by the effects of estate taxes or if you wish to transfer wealth to your future generations, then you need Life Insurance
If you have a family and you do not want them to incur a financial shock or expense if something unfortunate were to happen to you, then you need Life Insurance.
If you want to secure your family and plan for their better future, then you need Life Insurance
If you fall in any one of the above mentioned categories, you definitely need Life Insurance.
But even if you are not in any of the mentioned categories, and you still wish to protect your life against the unforeseen events that might happen so that you do not feel burdened, then you need Life Insurance.
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal
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You may write to the author at Deepak@myinsuranceclub.com