Life insurance provides you with two major benefits. First, it protects loved ones against the financial consequences of your death. Second, it offers living benefits.
Everyone knows that the financial consequences of death can be overwhelming. When a spouse, parent, child, sibling or grandparent dies, there is a great deal of emotional trauma to deal with by the surviving family members. However, the financial consequences can be even more destructive. If there is no life insurance in place, surviving family members are thrust into a position of extreme financial difficulty. Not only do they have to contend with the loss of future income, but there’s also the death and burial itself. They generate sudden and unexpected expenses.
Mortality statistics show that a significant number of people die, every year, before they reach their normal life expectancy. If the deceased person happens to have been a breadwinner, the consequences of their premature death can be extremely tragic, in many ways. The survivors are not only dealing with personal grief, but they must also find a way to deal with the financial consequences. There are still daily living expenses, even though one income is now missing.
Of course, the cost of a funeral can be heavy, but there are other expenses to consider, as well. An executor’s fees and expenditures involved with estate administration, for one. Outstanding debts such as car loans, mortgages, credit card balances, promissory notes, medical expenses, death taxes, and federal taxes, must still be paid.
The future security of loved ones is something else to consider. Living expenses, mortgage payments, and children to raise and educate are important considerations. It can be an overwhelming burden, and it really does not matter what financial obligations are left behind. There is only one thing that can resolve them, and that is money. If you want to ensure your family does not deal with the financial devastation a premature death can produce, you need to arrange to provide sufficient monies to cover their needs.
There may well be a time during which the surviving spouse cannot work, and for some, there is the survivor’s blackout period to be concerned with, as it is during this time social security stops paying the surviving spouse, because there are no longer dependent children. You may also want to ensure there are retirement funds available for a surviving spouse. Really, life insurance is a type of estate building, and it can create an immediate estate, at a time when it is needed most.
Life insurance also supplies living benefits, as some types of permanent policies offer a cash benefit. In addition to the death settlement, they accrue a cash value, and this cash value belongs to the policyholder. Some permanent policies also permit withdrawals from the cash benefit, and these can be used for any reason the policyholder chooses. The policyholder can also take out loans from the insurance company, by using the policy’s cash value as loan collateral.
Tags: d, death, disability, e, f, family, finance, h, health, health insurance, i, insurance, life cover, life insurance, n, p, people