Why You Should Have Life Insurance By AXA Mansard
Written by Smooth FM on September 10, 2019
One of the major pillars of personal finance planning is life insurance. A life insurance policy is important for everyone but continues to be clouded by a great deal of confusion, and even pessimism. If you are armed with the right information, the decision to take a life insurance is made simpler and you can arrive at the right choice for you and your family.
Here are a few things you should know about life insurance:
• If anyone relies on you financially, you need life insurance:
It’s virtually obligatory if you are a spouse or the parent of dependent children. But you may also require life insurance if you are someone’s ex-spouse, life partner, a child of dependent parents, the sibling of a dependent adult, an employee, an employer or a business partner. Even if no one depends on you financially, you may consider using life insurance as a strategic financial tool.
• Life insurance does not simply apply a monetary value to someone’s life:
Instead, it helps compensate for the inevitable financial consequences that accompany the loss of life. Strategically, it helps those left behind cover the costs of final expenses, outstanding debts and mortgages, planned educational expenses and lost income. But most importantly, in the aftermath of an unexpected death, life insurance can lessen financial burdens at a time when surviving family members are dealing with the loss of a loved one. In addition, life insurance can provide valuable peace of mind for the policy holder. That is why life insurance is vital for the bread winner of a single-income household, but still important for a stay-at-home spouse.
• Life insurance is a risk management tool but can also be an investment tool:
There are life insurance products that have a savings or investment feature through which a person can benefit while alive. These investments can offer tax rebates privileges as well.
• There are three primary players, or roles, in a life insurance policy.
These roles belong to the insurer, the insured and the beneficiary. The insurer is the insurance company, responsible for paying out claims in the case of a death. The insured is the person upon whose life the policy is based. The beneficiary is the person, trust or other entity due to receive the life insurance claim—or death benefit—in the case of the insured’s passing.
There are two broad varieties of life insurance you should be aware of—term and whole.
Term Life: This is the simplest and usually cheapest form of life assurance. This policy provides for the payment of the sum assured only if the life assured dies within the specified period/term. Term Insurance does not provide any surrender value and benefit is payable to the specified beneficiaries on the death of the policyholder.
Whole Life: Whole life insurance is a permanent form of insurance protection. It pays sum assured upon death anytime it occurs and benefit is payable to the specified beneficiaries on the death of the policyholder.
A whole life policy would usually have a surrender value payable after two years of inception and payment of full premium.
You can enjoy the benefits of life insurance even while you are alive. There are very many insurance living benefits that you can derive from taking a life insurance policy. You can take advantage of a life insurance policy to start saving and investing.
AXA Mansard insurance is committed to ensuring that its life insurance customers enjoy maximum living benefits when they access its life insurance products. Such living benefits include investment returns, free medical health check, accidental medical expense, permanent disability and critical illness.
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