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Why Do You Need Life
Insurance?
Life insurance protects
protects your loved ones such as children and spouse from the
financial consequences of your death.
Your life insurance
provides financial support to the beneficiaries named in your
policy. The types of protection include the following.
1) Income Protection:
The proceeds from the life insurance would ensure the same standard
of living even after you.
2) Payment of Debts:
Typically people have loans such as home mortgage. A mortgage
insurance could be used to pay for the home loans in the event of
the death of the policy holder.
3) Business Partnership
agreements: In a partnership business, the partners typically
insurance the lives of the partners. The payments from such a policy
would be used to buy the deceased person's share of the business
from the family.
Life
Insurance may also be used as a vehicle for investing. Some forms of
insurance policies provided payouts in the form of dividends and a
maturity payout. Such dividends and payouts are not taxed until the
money is with drawn. So these payments are tax deferred.
Types of Life
Insurance Policies:
a) Term Insurance: The policy holder is covered for a
specific time period as specified in the insurance contract. The benefits
are paid only if the person dies within that time frame. No cash is
refunded after the end of the time period.
b) Cash Value Policies: These policies keep adding
money to the policy holder's account by issuing dividends etc. The
policy holder may with drawn this money only by canceling the
policy. In the event of the death, only the death benefits of the
policy are paid. The accrued cash is not paid.
c) Annuities: These types of policies pay the benefits during
the life of the policy holder rather than at the death.
How much Life
Insurance Should You Buy? Coming Soon.
How to Save Money
on Life Insurance ? Coming Soon.
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