Everyone will agree that an appropriate life insurance plan is essential so that you can rest assured that the financial needs of your dependents will be taken care if something unforeseen happens to you. There are several important and compelling reasons why you should acquire a life insurance.
Once you have the right type of life insurance, you can feel confident that there will be adequate money for your heirs and dependents to lead an honorable life. Besides, you may have a loan liability, a car payment or mortgage that needs to be settled if you suddenly pass away.
If you suddenly fall seriously ill and run up huge medical bills or there is the urgent need to meet the funeral costs, your survivors need not feel helpless and suffer from paucity of funds. It is a grim fact that many families get into serious debts when the lone breadwinner suddenly passes away. If you have a life insurance policy with adequate cover, you can feel supremely confident that your dependents will not turn destitute in the event of your death.
Life insurance policies are important for a variety of reasons including debt repayment, income replacement, estate planning etc. Without a life insurance policy, your death could spell financial disaster for your heirs and can irreparably damage their financial future.
If you are a working spouse, chances are your family relies on your income for livelihood. A life insurance policy can help to replace that income at least for a short period till the family is able to explore alternate means of income. A life insurance policy can help them pay off whatever debts you leave behind. It is unfair that you should saddle your spouse or children with any unsettled debt burden.
If you have school-going or college-going kids, a life insurance policy can provide funds to pay the tuition fees and their educational pursuits will not be affected. If you happen to own a large estate to bequeath to your heirs, then there will be estate taxes to pay. A life insurance policy will come in handy to settle the liability and prevent liquidation of your assets.
Do not imagine that life insurance will only be payable to the beneficiaries after your death. Life insurance policies can also have a savings or pension component which can become a source of income for you post retirement – if you happen to live long enough.
Many people may not be aware that the right time to buy life insurance policy is when you are young, healthy, physically fit and free from ailments. The premium payable will be a small amount and you will be required to pay the same premium until the age of 65. This will mean tremendous savings and therefore the golden rule is the earlier you buy life insurance, the wiser you are.
Tuesday, February 15, 2011
is it better to buy insurance or save money - Insurance
Many people, when looking for health insurance quotes or other types of insurance premium pricing information, begin to feel like they would be better off just saving their money rather than sending it to an insurance company to make a premium payment. They often feel this way because they think that the likelihood that they will actually use the insurance that they are paying for is low, so they will spend all this money on premiums and then have nothing to show for it, which leads many individuals to decide that it would be better save their money and put it into an interest-bearing account and forgo the insurance policy.
Savings vs. Insurance
An insurance policy pays for large expenses - things it would likely take you years to save enough money to pay for on your own. And these expenses aren't just big in terms of cost, they are important. For instance, staying with the example of health insurance - let's say you need knee surgery. If you haven't saved enough money (tens of thousands of dollars) to pay for this and you don't have insurance, then you need to wait until you have the money in your account before you can get it done. That means you will have impaired mobility for years until you have enough to pay for the surgery. If you have insurance, however, you can get the surgery post haste. You can also get treatment for emergency medical needs and not have to leave the hospital wondering how you are going to pay for it.
Making Insurance Affordable
The real issue here is making sure that you can afford the insurance premiums you are paying. Avoiding insurance and trying to save the premium dollars will probably leave you high and dry when you actually need the money. But creating an insurance premium that you can actually afford to pay - and don't resent doing so - will be a better plan. Here are a few tips to help you do so:
1. Look for discounts: Whether they come from bundling several insurance policies through one insurer, from taking the necessary steps to be a low-risk customer, or from paying your entire bill annually, take advantage of all the discounts you can. They add up!
2. Get only the insurance coverage you NEED: No matter what type of insurance you're looking at, get only the amount you actually need to cover that individual risk. Being over-insured doesn't provide you with any extra protection. Insurance is meant to make you whole, so the insurance company isn't going to give you an extra payment if the value of what you are insuring wasn't worth that much (the exception here being life insurance, which pays out your death benefit in full).
3. Continually review your policies: Your lifestyle and situation can change continuously and when it does, so too should your insurance. Every year before you renew, make sure there isn't anything frivolous that you are paying for and no longer need and adjust anything else that could have a bearing on your premium.
If you plan it well and stay aware of discount opportunities, you will maximize your insurance premium dollars without sacrificing the coverage you need.
Savings vs. Insurance
An insurance policy pays for large expenses - things it would likely take you years to save enough money to pay for on your own. And these expenses aren't just big in terms of cost, they are important. For instance, staying with the example of health insurance - let's say you need knee surgery. If you haven't saved enough money (tens of thousands of dollars) to pay for this and you don't have insurance, then you need to wait until you have the money in your account before you can get it done. That means you will have impaired mobility for years until you have enough to pay for the surgery. If you have insurance, however, you can get the surgery post haste. You can also get treatment for emergency medical needs and not have to leave the hospital wondering how you are going to pay for it.
Making Insurance Affordable
The real issue here is making sure that you can afford the insurance premiums you are paying. Avoiding insurance and trying to save the premium dollars will probably leave you high and dry when you actually need the money. But creating an insurance premium that you can actually afford to pay - and don't resent doing so - will be a better plan. Here are a few tips to help you do so:
1. Look for discounts: Whether they come from bundling several insurance policies through one insurer, from taking the necessary steps to be a low-risk customer, or from paying your entire bill annually, take advantage of all the discounts you can. They add up!
2. Get only the insurance coverage you NEED: No matter what type of insurance you're looking at, get only the amount you actually need to cover that individual risk. Being over-insured doesn't provide you with any extra protection. Insurance is meant to make you whole, so the insurance company isn't going to give you an extra payment if the value of what you are insuring wasn't worth that much (the exception here being life insurance, which pays out your death benefit in full).
3. Continually review your policies: Your lifestyle and situation can change continuously and when it does, so too should your insurance. Every year before you renew, make sure there isn't anything frivolous that you are paying for and no longer need and adjust anything else that could have a bearing on your premium.
If you plan it well and stay aware of discount opportunities, you will maximize your insurance premium dollars without sacrificing the coverage you need.
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