Why Life Insurance Is a Must Have InsuranceFriday, March 15, 2013 Mary Anne Velasco
Life insurance is one of the most important things you need to obtain. Your family will thank you when the time comes to deal with your final expenses. It is especially important to have life insurance if you have children that depend on you.
● Life Insurance for Parents
If something happens to you before your children are legal adults, you will want to know that their appointed guardian will be able to support them financially. This is why it is crucial to have a life insurance policy in place. This will allow for the guardian of your child to receive the life insurance pay out tax-free when you pass away. Another benefit is that having a beneficiary other than your estate eliminates the need for your loved ones to have to pay probate fees that can end up being expensive.
● Obtain Cash from Your Insurance Plan
If you sign up for universal life insurance, you may be able to take a portion of those benefits and receive them in cash while you are still alive. Throughout the years when you are paying your life insurance premiums, the cash will build up. Then if you get into a position later on where you cannot pay your insurance premiums out of your income, you can dip into that stash of cash. For this to be possible, you have to have enough money in your cash reserve to prevent your policy from lapsing.
● Sell Your Insurance Policy for Cash
If you have already purchased life insurance and you then become terminally ill and can't work, you may be able to sell your policy. A viatical settlement company will buy your insurance policy at a discount and pay your premiums for you. Then when you pass away the settlement company collects the face value of your life insurance policy. By selling your insurance policy you won't receive as much money for it as your beneficiary would upon your death but if you make all your premium payments you can receive a lump sum of cash. This can be helpful if you have a financial emergency and need money quickly.
● Life Insurance as an Investment
If you a young professional you may think you don't need life insurance. This is an incorrect myth because young people can benefit from having this type of insurance for a reason not many people think of; buying life insurance can be a great investment in your immediate future. This is because a variable life insurance policy will allow you to add something valuable to your investment portfolio. Having life insurance when you are young and successful can help you invest in mutual funds, stocks and bonds. Having these investments means that you may be able to increase your cash value quickly when you need it. Financial experts recommend that you choose a policy that has a minimum death benefit.
Life insurance is always an important investment to make. It provides your family with some peace of mind in the event of your death.