Top 4 Reasons Why You Need A Life Insurance

Here are the top four reasons why you need a life insurance:

Reason number 1- Life Insurance is a must for your wife’s future.

Life insurance is a women’s issue because most of the time they will be the beneficiaries of their husbands because based on statistics, men have higher mortality rate.

But it does not mean that women should not be insured. There are times when the wife dies first, and if the husband has no income, then the insurance will support him. You can not predict the future and anything can happen.

Women want financial security. If the husband loved his wife, then he must be insured to make his wife financially secured in the future. In their early years, the couple usually refuses to talk about this matter and most of the time it will result in the financial hardship experienced by women in later life.

The couple usually deter the decision to do something about preparing for their financial future until they realize that it is too late.

A woman usually feels awkward asking her husband about the exact financial provision that has been made for her. Or maybe a woman does not marry, in which case she must provide for herself, but fails to do so.

As I have mentioned above, based on Statistics. women typically live longer than men. 70% of the time, they are going to be the beneficiary of an insurance policy.

What will happen if the husband died and left his wife alone? Who will support the woman?

You can find a widow who is living well and you can find a widow who is not.

There is only one thing that separates those women…and that’s life insurance.

Reason number 2 – Life Insurance will pay your tax.

Any estate — large or small — will require money to pay taxes, administration expenses, and outstanding debts. Estate liquidity is also very important for providing living expenses to a surviving partner, spouse or dependent children.

For every country, there could be different laws and provisions regarding tax issues but usually it concerns about the estate tax.

Estate tax is tax paid by lawful heirs in order for the deceased person to transmit his estate. It is a tax imposed on the privilage of transmitting property upon the death of the owner.

The tax amount to be paid could be around 5% – 20 % of the net estate, depending on the law of a country. You can imagine if the lawful heirs has no money to pay for the estate tax, then the ownership of the property will not be transferred.

Reason number 3 – You can transfer your wealth easily.

Life insurance instantly create wealth and can increase the amount passed on to a recepient or beneficiary.

There are many payment methods available and affordable depending on the insurance company, but usually for easy wealth transfer, a single premium life insurance is a valuable investment when it comes to wealth creation and transfer.

The benefit will depend on the amount deposited, gender, age and health of the insured. In many cases, this single deposit will be multiplied by a factor of two or more when the benefit is calculated. Typically, younger insured have higher benefits.

For example, a 65-year-old healthy, non-smoking man who deposits $100,000 into a single premium life policy could pass $200,000 or more in death benefit to her beneficiaries. Moreover, the benefit is income tax-free to her recipients.

Reason number 4 – Life Insurance is an added security.

A life insurance can also benefit the insured or the purchase during his or her lifetime. The cash value in a fully funded policy will grow and can provide income if needed.

The insured can also surrender the policy for its cash value at any time. There are policies that guarantee the cash value to be no less than the total premium deposited. This way, if the insured needs to surrender the policy due to inforseen circumstances, he or she is guaranteed to get the investment back.

The insured also has the option of taking a loan against the policy instead of surrendering the contract if desired.

 

featured image source: pixabay

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