Life Insurance: Why Would You Need It?
Out of the many types of insurance available, life insurance is one of the most common and popular ones. Life insurance is a policy whereby the insurance company pays out a sum of money upon the insured’s passing.
This payment will be done to persons nominated by the insured individual, usually their close family members.
As an individual, life insurance will not benefit you directly. Instead, it will benefit your loved ones in the event of your passing.
Here are some reasons why you should have life insurance:
Provide a temporary income for your family
If you are the main breadwinner for your family, your absence will mean that they won’t enjoy your income anymore. Therefore, to cushion the blow financially, you can provide the payout from your life insurance.
This will be able to tide them over for some time until they find a more permanent source of income and be more financially stable.
Covering the costs of your own funeral
Funerals can be very costly these days and many people even go into debt over it. Even the simplest funeral packages can run from five to six figures. Most life insurance payouts will be sufficient to cover the costs of funerals with leftovers.
All in all, it will lift a great financial burden on your family members. They may have to pay out of their own expenses to begin with, but the insurance payout will reimburse them once it has been processed.
Covering hospital bills and other health costs
Most of the time, especially in the case of prolonged illness, there would be a considerable medical cost to cover.
This cost can be a burden to your remaining family members. However, with life insurance, you can take yet another financial worry off their minds.
Providing for your children’s education
If you have young children, having a life insurance payout can provide for them and make sure that they can continue their education uninterrupted.
This is especially important when they reach the tertiary education phase, since college and university costs are considerably high and they will also need living expenses and allowances if they have to live outside of home and on campus.
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Paying off your debts
When you pass, your family will appreciate it if you leave them some means to settle any debts you have left. These include car loans, housing loans, business debts and the like.
Ensuring that your family is not saddled with your loans is one way you can safeguard their future. It will give them a chance to live their own lives without being burdened with debts from a family member.
Safeguarding your own assets
With a life insurance payout, it will help your family avoid a situation where they have to sell off your assets to gain financial stability and to pay for the costs surrounding your passing.
This has commonly been the case in many families whereby assets like houses, buildings, cars and businesses have to be sold during the transitional period, especially to repay debts and the like.
With life insurance, you can ensure that the assets you worked so hard to accumulate will be able to stay within your family and benefit them for longer.
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How Much Life Insurance Should You Buy?
This is a pertinent question to ask yourself. A general rule is to buy a policy with a monthly premium that you can afford on your current income. Additionally, you should also take into consideration the payout upon your passing, whether it would be enough for your family to make the necessary payments and have
leftovers for their own use.
Understanding The Different Types of Life Insurance
Different insurance providers package their life insurance policies differently. This is usually to accommodate the different financial capabilities of their clients. These are the usual types of life insurance you’ll encounter.
Term Life Insurance
A term life insurance will only cover you for a limited amount of time, whether its 10 years or 30 years. One of the most common term life insurance is Decreasing Term Life Insurance, whereby the coverage amount decreases the longer the insurance policy lasts.
Apart from that, you’ll also find Convertible Term Life Insurance, which can be converted to a permanent life insurance at a predetermined time, and Renewable Term Life Insurance which can be renewed for another set period of time.
Whole Life Insurance
Permanent Life Insurance policies typically cover you for your entire life, from the time you purchase the policy until your passing. The premiums on a permanent life insurance are typically higher than term life insurance policies.
Permanent life insurance also comes with extra perks and benefits, such as a cash value that can be withdrawn, earning interests with that cash value, earning fixed or indexed rated returns,and many more.
Enjoy Great Eastern’s Life Insurance
One place that you can start finding out about life insurance is Great Eastern’s two life protection policies.
Great Eastern’s Great Life Gift
The Great Life Gift policy is a standalone policy that offers more than our regular policy. You can enjoy up to 3x basic assured sum for accidental death, as well as coverage for permanent disability.
The main attraction of this policy is of course its hassle-free enrollment with no need for medical underwriting. This means that you’ll be eligible even if you suffer from chronic illnesses.
Great Eastern’s SmartProtect Legacy Max
Enjoy cash value and stable premiums for the SmartProtect Legacy Max policy. Apart from death, this policy also protects you when you suffer permanent disability and are unable to work.
For the cash value portion, you’ll be able to choose the investment funds that suit you the best, all of which have different returns and risk levels, as well as different management fees.
Speak to us today about how you can start planning for your loved ones in the event of your absence. Life insurance is essential to ensure that there is a financial cushion for your family and shouldn’t be perceived as something negative.
