Reasons why you buy life insurance policy

 

It is essential to buy a life insurance policy so that you can secure your and your family member’s future. This policy is said to be a contract that is made between you, the insured and the insurance company. The policy protects you from any unusual circumstances that may happen anytime in your life. It also covers the risks such as flood, earthquake, etc. You need to know that the policy’s cost depends upon the age and financial condition of the person who is buying the policy.

Go through this article to know why you should buy life insurance policy.

Provide coverage for expenses

Life insurance policy provides you coverage for your funeral expenses. This plan also helps you get coverage for the medical expenses which are not covered by the health insurance policy.

Build up a savings plan

The life insurance policy can be said as a source of savings plan to secure your future. You will find some insurance policies which make cash value for withdrawal upon the request of the policyholder. The savings plan also provides interest as tax deferred and the interest can be tax exempt in case the money is paid as death claim.

Source of income for the family

You buy a life insurance policy so that it can be a source of income for your family when you will no longer be employed. The life insurance policy also can be said as one of the best ways to protect your family in case you pass away. The policy acts as a support for your family members when you are no more with them.

Create inheritance

The life insurance policy helps you create inheritance for your family members. It may happen that you do not have any valuable asset with you that you can give to your family members. You can create an inheritance by making your family members as the beneficiaries of your insurance policy.

Make contribution for charity

You may make a charity as beneficiary of your life insurance policy. This way you will be able to make good contribution rather than by donating cash from your policy’s premium. By donating your term life insurance policy, you give the permission to deduct cost of the premium from your taxes. But, in case of a whole life insurance policy, you may deduct the cost value of the policy and also the premium cost of the policy. In case you pass away, the insurance policy will go away to the charity that you will select for both the policies.

The young people buy life insurance policy so as to provide a source of income for their family members in case something happens to them. But, the old people buy this policy so that they can keep some money for their family members when they will not be there beside them. Shop around thoroughly before you buy a life insurance policy so as to be able to get the most suitable one as per your needs.