Advantages of owning a life Insurance policy
Life insurance is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the “benefits”) in exchange for a premium, upon the death of the insured person.
A life insurance policy is created when you complete an application, are approved, and start paying premiums to the life insurance company. When you die, the life insurance company pays the policy’s death benefit to your beneficiaries. How the insurance company handles those premiums in between their receipt and the payment of a death benefit (if there is payment) is what determines how profitable that insurer will be.
The main advantage of owning a LifeInsurance policy:
If you die, your beneficiaries receive a payout called a death benefit that replaces any income you provided while you were alive. The biggest disadvantage: You have to pay monthly or annual premiums for this benefit.
The pros of having life insurance outweigh the cons for most people with financial responsibilities such as mortgage payments, children, or student debt. If you’re able to incorporate life insurance premiums ($25 to $35 per month for the average 35-year-old) into your budget, you can rest assured that your family will be financially secure if you die unexpectedly.
Why Should you buy LifeInsurance In Your 20s?
- LifeInsurance is cheaper, the younger and healthier you are.
- That is because as you age, health problems are more likely to crop up that could increase the cost of coverage or even make you uninsurable.
- How old you are affects how much coverage you can afford.
- Determined that you need life insurance now, get a policy for a set term of years (typically, 10, 15, 20, or 30 years) coverage amount you can comfortably afford.
- Even if the coverage amount is less than what you need.
- Yours finances improve, you can get a larger policy that covers the rest.
Insurance is not an investment product, its a Protection instrument for your Family or any one your want to cover. There are other products for your investments.Life insurance is one of the most selfless things you’ll ever buy. It’s about making sure that the people you love the most are well looked after should the worst.
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