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Life insurance is a protection vehicle that covers the life's unexpected events.
If you’re one of those people who don’t think they need life insurance, think again. There are very clear benefits for purchasing a life insurance policy, besides getting rid of annoying insurance agents (who are often our relatives or friends). Remember that the money generated by your life insurance policy when you finally go six feet under can address a number of fundamental needs of your surviving family:
1. It provides income while your family is adjusting
When an income provider dies, there is a significant impact on the finances of the surviving family. Family income will certainly diminish and there’s a good chance that the survivors will experience a lower standard of living. However, the death benefits of a life insurance policy can prevent this from happening or at least keep the impact to a minimum by replacing income lost with the demise of the breadwinner.
2. It funds specific financial goals
In addition to providing survivors with income, proceeds from a life insurance policy can also provide funds to achieve specific goals that the insured may have planned for his family. These goals could include accumulating funds for college education of the children, the purchase of a home, or capital for a business.
3. It covers medical and funeral expenses
It is very likely that the insured will incur huge medical expenses prior to death.
4. It pays for taxes and debt
The insured may leave behind debts that need to be settled. If he has amassed a sizeable estate, taxes can become a big headache. Before the assets can be distributed to the heirs of the deceased, property and inheritance taxes and other fees will have to be paid. Life insurance benefits can provide cash for the settlement of such obligations.
Alvin T. Tabañag
February 14, 2009
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