Why You Need the Protection of Insurance

Kimberly Watson, Editor in Chief
July 27, 2012 /

For any one, it is always difficult talking about the chances of dying before your perceived time and with life insurance this is exactly what it is all about. Today, you are living in a high paced, stress filled world and disasters are happening to many people all the time. Unless it affects us directly, we have been conditioned to a great extent by the media to accept catastrophe as a normal part of life.

A particular instance where the value of life insurance has been proven is for newly married couples who are planning a family. The increasing costs of raising a family mean that it is difficult for a wife to take time away from work care for a child or children. However, the question related to the value of life insurance is determined by whether it term life insurance or whole life insurance.

The term life policy is generally preferred as the proper coverage for most single persons. This is due to their requirements being a determined term as they build different assets such as savings related to retirement.  The premium payable will be for a fixed amount, either paid monthly, quarterly or annually, for which you receive life insurance cover for a determined number of years but only in respect of benefits on death.

Whole life insurance describes a lifelong policy but with an additional investment factor. This enables you to accumulate cash on a tax free basis. However, should you cancel the policy before its expiry date; you would be liable for inherent fees, commissions and extra charges related to the surrender of the policy. These financial factors detract highly significantly from the investment aspect of the life insurance policy to the extent that various experts concerned with personal finance observe that there are preferred sources for investing your money.

Another aspect to consider related to the different life insurance policies is that whole life plans, usually require premiums that could cost ten times more than those of term insurance. Although, insurance professionals agree there maybe instances where you would benefit by whole life insurance, in general you would benefit more with the term life option.

Many Americans in the prevailing economy could consider saving money by reducing their life insurance. According to 2010 statistics, about 30% of American households do not have life insurance cover. Also shown was that among households with children under the age of eighteen, eleven million do not possess insurance cover.

For parents with their children living at home the fact of not being covered by life insurance could place the children at risk. In the event of parental deaths a life insurance policy could provide means for the children’s livelihood. For young and single persons without dependents the general advice is to postpone investing in life insurance to a later stage.

 

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