Why life insurance? Are they as complex as many people think? Are they really necessary? Unlike auto insurance, hiring a life policy is not mandatory; however, it becomes important when financial support may be needed in the most difficult times.
Life insurance policy is intended to become one of the main aids for families who have to deal with the death of a loved one or a disability situation that prevents the head of the household from continuing to work. In times as complex and difficult as these, life insurance offers the peace of mind that no matter what happens; the family will be able to maintain their accustomed standard of living for a certain period of time until they can readapt their lives to the new situation.
It is especially useful for dealing with mortgage loans or paying for children’s studies. On the other hand, it is worth knowing that death is not the only risk covered by life insurance. This means that there are other complementary guarantees that adapt to the needs and profile of each insured person.
6 reasons why you should take out life insurance
Protect your relatives in case you die
Risk life insurance aims to become an economic pillar for family members who in one way or another depended on the insured. Thanks to this compensation, the beneficiaries could move forward and face the main family obligations.
Cancel the mortgage in case of death
The death of one of the family members can destabilize the household economy. In this sense, being far-sighted and taking out insurance to pay off the mortgage with the insured capital is the most advisable thing to do.
If you are looking to free your relatives from bank charges in case they can no longer count on you, do not hesitate to take out life insurance. Keep in mind that, although many banks will try to get you to take out a life policy with them to grant you the mortgage, the reality is that the law does not oblige you to take out any type of insurance that the bank sells.
Cover the expenses involved in a funeral
Personal loans, pending charges to credit cards and expenses related to death… When a loved one dies, the expenses arise amid the pain and grief caused by a situation as difficult as the death of a family member.
Life insurance includes coverage for burial or cremation expenses, thus preventing family members from having to face the high costs involved in a burial.
Cover the risk of disability
Still wondering why life insurance is necessary? It is not necessary to think about death to make the decision to take out life insurance. Accidents or serious illnesses can arrive without warning and cause total or permanent disability. Not being able to work and generate income is a situation that inevitably drags down our family members and those closest to us. Therefore, having the insured capital in advance can allow you to meet your financial obligations.
Pay inheritance tax
Many people find it necessary to renounce their inheritance due to the high cost of paying the inheritance tax. Especially when real estate is included. This value will depend on what each autonomous community has stipulated.
Having life insurance is a smart decision. The compensation can be use to pay say tax and preserve the family inheritance.
Prepare for retirement
For those who wonder why it is important, the answer lies in the controversial future of the pension system. Hiring savings it is a good way to guarantee capital that complements the public pension.