When it comes to personal finance, life insurance is one of the most important things that you need to consider in your life. For a lot of people, it is THE most important aspect of their personal finances. Of course, people do happen to have their doubts. Skepticism can be good since it keeps you cautious and on your toes. After all, life insurance is not a small investment.
That being said, if you are interested in signing up for a life insurance plan, here is everything you need to know about it:
1. A Life Insurance Policy Entails Four Main Roles
Before buying life insurance, it is important to understand the roles of the insurer, the insurance owner, the insured and the beneficiaries. The insurer is the insurance company that facilitates the payment of claims in the case of the death of the owner. The owner is the person responsible for making the premium payments to the insurance company. The insured is whom the insurance policy is based on – usually the owner him/herself. The beneficiary or beneficiaries are people that are due to receive financial payouts from the insurance company in case of the death of the insured.
2. Life Insurance Is Not An Investment, It’s Risk Management
While a lot of people might think that life insurance is an investment, it really isn’t and it is important to understand that. You never know whenever something bad might happen to you or someone you love. If you are looking for an investment opportunity that will give you a good payout on a regular basis, there are plenty of other financial tools for you to consider. Life insurance is a risk management tool. In case of your death, your life insurance payout will be able to financially help those that you leave behind and get them back on their feet.
3. If You Have Dependents, You Need It
This brings us to the last thing that you should know about getting life insurance. If you have people that depend on you to meet their financial needs, you should get a comprehensive life insurance policy. It is not just your family that depends on you, it can be your siblings, business partner or any other person that relies on your financial support. Therefore, it is important that you get a good life insurance policy to help them in the case of your passing. If you’re someone who is retired, happy and has no longer got any dependents, you can still consider getting a life insurance policy as a strategic financial tool.
For more information on life insurance policies or any other insurance-related queries you might have, feel free to contact us. We’d be more than happy to speak with you!