Enjoying work, getting married, starting a family, having kids, growing old and retiring in the process is every one's life cycle nowadays, but there will always be unexpected turn of events. There may be untimely death due to accidents or diseases. Having life insurance guarantees that you will not be a burden to your family financially. However, it is not applicable to every insured individual because some life insurance companies have the right to end the benefits, if the payments are not made regularly; the policy expired or the insured individual unexpectedly dies in a way that is not covered by the insurance. But because life insurance offers death benefits at the same time savings benefit without any income tax deducted many are still availing.
The so-called benefits:
- Death Benefit – When availing life insurance policy, the main benefit that would be introduced to you is the death benefit wherein the insurance company provides financial support to the beneficiary usually the family of the dead insured individual. This benefit could pay off the debts and funeral expenses as well as the estate taxes. With this money, it could also fund the children's education expenses and other monetary expenses like the mortgage of the house or other loans.
- Tax Free Saving Benefit – One of the categories of life insurance is the whole life insurance policies which provide a cash value account, where some of the premium paid is transferred to an interest bearing savings account that could be received by the beneficiary as savings benefit without income tax.
- Policy Loan – This kind of benefit could be enjoyed while you are still alive by allowing you to withdraw from your insurance policy tax free to fund your retirement or be used for some other expenses. This isn't required to be paid back but the amount of death benefit and cash value of your insurance policy changes.
How to Start?
You could avail through an agent or directly to an insurance company. Then if you have decided which type of insurance to avail the cost of premium you are going to pay will vary on your age, gender, lifestyle, occupation and family medical history. If you belong to the working force, some of the employers offer insurance as one of the benefits to their employee. It's called a group insurance but this type of insurance is typically a term life policy. Some group unions could also avail this type of insurance and the individuals don't have to pass the test but when you leave the group you can't enjoy the benefits though this is cheaper as compared to an individual policy.
An individual life policy as the name implies, it only covers one person unlike the group that several individuals get to be insured. It's a policy that anyone could avail from the insurance company or from an agent. An individual policy holder gets to choose the type of policy that suits them and can even avail several insurance policies from several insurance companies.
Rest a Peaceful Rest