Money & Business

Is life insurance worth it?

The principle of life insurance, albeit a bit morbid, is financial compensation for a deceased policyholder. You are contributing to an insurance company to pay your beneficiary’s a lump sum once you die. This is the only thing that a basic life insurance coverage provides. Its aim is to ensure your family/beneficiary is not left financially needy once you, as a provider, dies.

The basic life insurance plan is to leave the people you care about with financial support/safety. However, this is only beneficial once the policyholder dies. There are life insurance plans that also provide other avenues to use the premiums that you have contributed, usually available once the policy “matures” or when you’ve contributed a certain amount already. These plans offer more comprehensive options to use the funds, like a way to finance a house, a marriage, a child’s education, and more. Some can even offer monthly pay-outs in the future, giving you an additional source of income during retirement.

The worth of an insurance plan is based on the premiums you pay and the policy you opt for. If only seen as a financial safety net for your loved ones once you die, then you will always have a return of investment especially once it reaches maturity. On the other hand, if you opted for a plan that gives you options for flexibility, it can be considered an investment for your future. Comprehensive life insurance plans will be more of a savings account for sudden financial strains rather than a one-time lump sum.

Whether a life insurance policy is for you will be up to how much you can contribute to it and if it is a plan you can financially stick to. The amount you contribute reflects the sum your beneficiaries gain. There will always be a sense of relief if you have a back-up plan for your loved ones. But to some, guaranteeing the necessity of the now far outweighs the unpredictability of tomorrow.

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