Do you have a life insurance policy? Have you not bought it since you cannot decide whether or not you really need it? If you've answered âyes' to both the questions, then you can go through this article to find out why you require a suitable life insurance policy.
1. You have to look after your parent - Do you think that you don't require a life insurance policy since you're not married and have no children? Before deciding to not buy life insurance, think whether or not your parents are dependant on your income. If yes, then you need to buy a life insurance policy. It is of utmost importance since your parents may have to hire professional replacement to look after them in your absence, and the services are quite costly.
2. Your family is dependent on your income - This is probably the most important reason for buying adequate life insurance coverage. You will always want that your family members can lead their present lifestyle even in your absence. So, you should calculate how much they would require continuing with their present lifestyle. The calculation will help you purchase the exact amount of life insurance coverage. While buying such a policy, remember that the earlier you buy the policy, the cheaper it will be for you.
3. You have a partnership business - In case of a partnership business, each of the partners should have a life insurance policy so that the business can run smoothly even if one partner dies. Otherwise, the deceased partner's contribution will be lost which in turn, can be detrimental for the success of the business venture.
4. You are paying off a mortgage - You obviously will not want that your spouse is compelled to leave the house since he/she cannot make the required mortgage payments when you no longer will be around. So, if you've taken out a mortgage loan and making monthly payments to repay the loan on time, this it is advisable you purchase a life insurance policy. Doing so, your spouse can remain current on the loan and will not have to face the stress and trauma to vacate the property.
5. To cover funeral cost - Life insurance can also be purchased to cover the funeral and burial costs. The beneficiaries of the policyholder can use the policy proceeds to cover the final expenses.
6. As a source of savings - You can also use such a policy as a source of savings by buying a whole life insurance policy with a cash value. You can pay the premiums and the tax deferred cash value can be withdrawn upon request.
Even if your family members can maintain their present lifestyle in your absence, you can consider buying a life insurance policy to donate to a charity. If you've always wanted to donate significant amount to a charity, then you can buy a life insurance policy and name a charity as the primary beneficiary of the policy.