This article stresses the importance of life insurance, and tells you why most of us should buy it…
Picture this: You are leading a comfortable life. You work hard, and earn enough to keep yourself and your family happy. Your life is going on as planned, and you expect to increase your earnings and the standard of living of your family as time goes by.
What if…
Now, for a second, remove yourself from the picture. (I know it is hard, but just do it for a second!). Do you see your family living as comfortably without you as before? Would their standard of living remain the same of you are not around?
The most likely answer is – No… It doesn’t even depend on whether yours is a double income family or not. The loss of an income always creates a dent in the financial plans of any family. And if that income is the only income, the damage can be very severe.
Yes, we don’t like to think about dying. After all, it is not a pleasant thing! But considering the effect of an untimely death on our families, shouldn’t we plan a little, just in case something wrong happens?
Nothing can be done to compensate for the emotional loss of the family. But shouldn’t we do something to take care of them financially when we are not there?
Of course we should – especially when help is readily available in the form of Life Insurance!
What is Life Insurance?
Life insurance is a long-term contract between you and the insurer. In this contract, you agree to pay a periodic amount to the company regularly. In turn, the company agrees to pay your nominee or your legal heir a pre-decided sum in case you die within the pre-decided time.
The contract between you and the life insurance company is called the Life Insurance Policy. The periodic payment that you make is called the Premium. The amount that the insurance company would pay in case of your death is called the Sum Assured.
The period for which you pay the premium is called the Premium Paying Term. And the duration for which the company promises to pay out the sum assured in case of your death is called the Term or the Tenure of the policy. In most life insurance policies, the premium paying term and the tenure are the same, but they may differ in some type of policies (more about this later).
Who should buy life insurance?
If you have anyone who relies on you for their expenses, you should buy life insurance. That is, if you have any dependent, you should buy life insurance.
The dependent(s) can be your parents, spouse, kids – anyone who can be in trouble financially if you are not around.
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