Life insurance meaning, features, types and importance of it.
Alots of people have keep asking, what’s the meaning of life insurance and why they should get involved in it, well that’s the reasons why we have come on todays topic to give you the meaning of it and why you should choose life insurance.
“Life Insurance” is the payment your family could be receiving after you may have passed away. This will help them take care of some necessity, which means you live a useful life and your passed away won’t be a much bothern to your family.
On the line below, we have taken much time to give you the meaning and reasons why you should choose life insurance, as listed or analyzed gradually below by our expert.
3 Considerable Insurance You Should Think Of.
1.Family and work situation
First of all, your insurance needs will be influenced by the following: your family situation, your age, your health situation and whether you are an owner or self-employed.
Life insurance is important, whether you are single or in a relationship. In the event of your death, your loved ones will have to pay your funeral expenses and pay off any financial liabilities you have, such as your debts. If you have insurance coverage, your debts will not be a burden for your family members.
In addition, your loved ones may also have to bear some of your shared responsibilities, such as your credit card fees, your lease, your car payment, your mortgage payment, your student debt, or other. If you have children, life insurance will let you replace the lost income from one of the parents to provide for the children’s needs.
Life insurance is also an effective financial tool for protecting your business. It lets you ensure you and your loved ones’ financial security should something bad happen.
If you start your own business with a partner who passes away prematurely, will you have the funds needed to buy out his/her shares and continue moving forward with your dream? An unfortunate event like this could have a major impact on your company. So you need to start thinking about it now. If you don’t have coverage, getting a policy will let you cover your needs as a self-employed person and will avoid future concerns for your family.
2. Life goals
Your personal, family and professional goals will also determine your choice of life insurance. For example, do you plan on having children? What are your career and income goals? At what age would you like to retire?
This will help you evaluate how much life insurance you should take out to protect your loved ones in the event of death.
You have thought about your situation and life goals. Now all you need to do is figure out what type of life insurance is best for you.
For example, you might ask yourself if you need short-term or long-term coverage. Do you want coverage that generates liquidity and surrender value that you can use to reach your goals, etc.?
Once you answer these questions, you will be well equipped to choose the life insurance that works best for you.
A financial security advisor will be able to guide you in answering all these questions, and based on your answers, can direct you to life insurance that meets your needs.
7 Reasons & Benefits Of Life Insurance.
1.) Insurance Keeps Commerce Moving
In the days after the 9/11 attacks, there were many worries about insurance coverage. Acts of war are not covered by insurance. Was terrorism an act of war? The big question was, How would the 9/11 attacks be classified? Fortunately, the insurance industry decided the attacks were not an act of war.
However, after 9/11, some insurers began excluding terrorism. But the federal government stepped in and required coverage in the name of keeping commerce moving. In this case, insurance likely prevented many businesses from avoiding terrorist-targeted operations, such as refineries and chemical haulers.
2.) Lenders Require Insurance
This reason is tied to No. 1. Lenders require that you have insurance. Think about it: Mortgage lenders want proof of insurance before you buy or build a new building. In short, to get the money your business needs to keep going, it’s likely you enjoy the benefits of insurance. Without insurance, your winning business model can’t get the funding it needs to take its first step, or your established business model can’t get the funding to evolve and better compete.
3.) Insurance is Compulsory in Some States
Insurance is important because sometimes it’s the law! A great example of this is auto insurance. Auto insurance is compulsory in Wisconsin (home of HNI HQ). Auto insurance helps mitigate the risk of life on the road (of which there are many!). Workers’ compensation is a form of compulsory insurance that’s required in most states.
4.) Insurance Grants Peace of Mind
Insurance, an intangible, provides another intangible: peace of mind. Business owners can take on certain business ventures because they can shift the risk — thanks to insurance. This reason is the counterpart to No. 2 — lenders require insurance. Insurance is the required (by lenders) safety net that lets entrepreneurs explore opportunity.
5.) Insurance Ensures Family and Business Stability
Insurance is a safety net for when risks go wrong. Life insurance can support the life of a family, should a member be lost. It’s similar for a business. Should a key member or piece of equipment go out of commission, the business can carry on, thanks to insurance. This reason why insurance is important dovetails nicely with peace of mind (No. 4). It all goes back to the idea that insurance, when activated, makes policyholders whole again.
6.) Insurance Protects the Small Guys
When you look at your industry, you see the “big guys” and the “small guys.” If a risk goes wrong, the big guys will be able to survive. They can take a hit. But the little guys can’t take a hit. As a result, they are more risk averse, and in some cases, they sell out to the big guys. If enough little guys leave the industry (and one big guy swallows them up), you’re left with a monopoly. With insurance, however, the little guys have support if they want to take a risk, which means they stick around longer. What it comes down to is that insurance helps prevent monopolies from forming.
7.) Insurance is the Right Thing to Do
A sobering example of insurance in action is the West Fertilizer Co. explosion in Texas this spring. The explosion did $100 million in damage to the community, including schools and hospitals. The fertilizer company had only $1 million in general liability coverage.
Now the city is suing West Fertilizer and likely will win all of the company’s remaining property and assets that were not damaged by the disaster. This is because the fertilizer company did not have enough insurance. What’s more is the city also is suing the suppliers to the fertilizer plant, claiming they knew they were supplying inherently dangerous materials. In the case of the West, Texas, plant explosion, insurance could have helped a community to recover after a crisis.
Insurance is something many business owners don’t want to think about. But whether they think about insurance, with hope it’s there, allowing for transfer of risk and providing a safety net for new opportunities.
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