Life can take an ugly turn in this fast paced life. If you are the breadwinner of your family, your death can be a huge blow. At such times, your bereaved family members have to cope not only with the personal loss, but also with the financial crisis. You never know what is in store for you next; therefore, buying Life insurance becomes a necessity. Life insurance is a potent financial tool that offers many benefits to not only the insured person but also to the beneficiaries. Insurance policy guarantees that your loved ones are taken care of in your absence and are financially secure.
So, what exactly is life insurance?
Wikipedia states life insurance Life insurance as a “contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the “benefits”) upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses) are also sometimes included in the premium; however, in Australia the predominant form simply specifies a lump sum to be paid on the policy holder’s death.”
So, what are benefits of life insurance?
It offers financial protection to the family members in the event of the policyholder’s demise.
It offers you many investment options to plan for your children’s higher education, marriage, a home, and even retirement.
Life insurance policies can help you in paying off your mortgage, rent and outstanding debts. If not this, then you can use this insurance benefit amount as a source of income when you retire.
Funeral services are getting costly with every passing day. In a time of untimely death, the bereaved family members can use funeral insurance to pay off all the costs related to funeral.
Buying a policy means you need to pay the stipulated premium at regular intervals. This leads you to practice money saving, thus making you save a certain amount of money to meet your future financial needs.
To know more on life insurance, visit www.lifewise.org.au.
