Life insurance policies are a type of insurance policy taken by a person known, as the assured, who pays a premium in an exchange for insurance against future uncertainties like accidents or death. You probably know all this already; now here are some reasons why you should purchase a life insurance policy.
#1. To pay for children’s education
Since its a dream of every parent to see their children have access to the best standard of education, it’s a good idea to purchase a life insurance policy to cater for your children’s education. Even at the point of your death, the insurance payout can be used to pay for your ward’s school expenses.
#2. It could serve as a form of savings
A life insurance contract is a form of savings since you can withdraw from it after an agreed period of time. It can be used to cater for certain needs and wants in the future.
#3. It serves as a replacement of income
Life insurance policies could serve as a source of alternative income in instances where policy holders are unable to maintain their employment. Typically, after retirement or some major life event such as an accident, owing to which a policy holder can no longer be expected to maintain active employment, they may submit a claim for a payout from the insurer.
#4. To pay off debts
Life insurance policies can also be used to pay off debts like mortgages instead of you having to sell off your valuable assets for this purpose.
#5. It serves as protection for your wards
The most obvious benefit of life insurance policies is the fact that they provide some protection for your legal wards in the event of your demise.
With some life insurance plans, you will become a shareholder of the company which means that you will be paid dividends on top of your principal, which can be claimed by your survivors after your death.
Life insurance policies are a contract of benefit to you and your beneficiaries, so purchasing one can only be a good idea. But make sure you purchase the best life insurance policy for you, since there are different types with different premiums and benefits.