Good life insurance contributes to your peace of mind!
You always have to be ready for everything. We do not know what may happen tomorrow, or the day after. We are not able to foresee some exceptional situations, such as the coronavirus pandemic , but we can prepare for its consequences in a certain way. So having an emergency backup plan is of the utmost importance.
You love your family. You want the best for them. You've fought your whole life to get them through, but some things are unavoidable. And if you are the main provider for them, your death could spell financial disaster. If you don't want this to happen, one of your best options is life insurance . Here we explain everything you need to know.
What is life insurance and what is its function?
In the event of your death, life insurance is gross income (without tax deductions or other) that is awarded to your family or to the person or persons you designate as beneficiary in your policy. These are thought more than all for adults who are around 40 years old and who have a family that depends financially on their income.
As you can see, it is a very useful benefit, especially if you are concerned that it will be your family once you are gone. This granted income can be freely used by the beneficiaries to pay things like bills, university studies (or any type of studies), debts and things as mundane as purchases.
There are many types of insurance policies, but there are 4 main components that you will find in all:
- It is the one who owns the policy. If you die, death benefits are released, although it is also possible to set someone else as the trigger.
- It is the person or persons who will receive the benefit after the death or permanent disability of the owner of the policy.
- The cousin. Money paid monthly or annually to keep life insurance in force.
- Death benefit. It is the amount of money released to the beneficiaries.
Once your first payment is made, the life insurance takes effect immediately. The death benefit will always be released in the event of death, but there are a few small exceptions.
For example, if at the time of death the life insurance has expired, or if the death occurs two years after taking out the insurance and evidence of fraud is found in the application.
What does life insurance cover?
This may vary depending on the insurance policy you hire, but we have compiled a list of the most common cases that you will find in insurance coverage :
- Main risk . It is the reason mentioned above and the best known, death from any cause.
- Serious diseases. You can find a list of diseases covered by a specific insurance policy. If the insured reaches an age in which it is more common to acquire a certain disease, it will be discarded.
- Permanent disability. If you are unable to work due to an accident, there are life insurance that covers these aspects.
- Disability or death by accident . If you end up disabled, or worse, die due to an accident, such as a traffic accident, some insurance policies increase the benefit in specific cases like these.
Advantages of life insurance
Regardless of whether you have already made the decision to obtain life insurance , here we have compiled the most important reasons why it is necessary.
- It's accessible protection . In monthly payments, life insurance can cost even less than your internet bill. Taking into account the benefits that you and your family will obtain, it is a very viable option.
- Provides tax-free money . The entire promised payment goes to your beneficiaries, without deducting taxes. So your beneficiaries will enjoy full income and will not have to limit themselves when planning for the future.
- It is an investment . There are insurance policies that offer interest on savings. You will be paying for financial protection as well as generating extra income at the same time.
Now that you know the advantages of life insurance, it is your decision to hire one. Remember that in any emergency, having a wide coverage in your insurance or having money saved will help you get out of trouble.