Life Insurance in its most basic form offers financial security to your loved ones to settle any monetary obligations in the event of your death. So if someone depends on you financially, chances are that you need life insurance. To figure out if you need life insurance, think through worst-case scenario like – if you’re the only breadwinner, and you die how will your loved ones cope financially? Would they have the money to pay for your final expenses like funeral costs, medical bills? Will they be able to meet ongoing living expenses like rent, food, clothing, healthcare, transportation, education, etc?
Losing someone is huge emotional upheaval for the near and dear ones. These struggles need not be compounded by financial difficulties. Hence life insurance is a must.
Life Insurance provides instant cash to your family after death. This cash replaces your insured’s income and can help your family meet many of its financial needs. Whether you’re married, single parent, stay at home parents, retired, a small business owner or single – life insurance makes sure that people you care about are financially well off to meet their daily expenses even if you’re not there to take care of them.
What is a beneficiary?
When you take out life insurance, a beneficiary has to be named. A beneficiary is the person (or a financial institution) who will receive your life insurance proceeds in case of your death. You should name a second dependent beneficiary, in case you outlive the first beneficiary. Pay special attention to the wording of your beneficiary designations to ensure that the right person receives the proceeds of your life insurance policy. Naming one and keeping that choice up-to-date are substantial key elements that have to be taken into account while purchasing life insurance.