Life insurance benefits for the living and during death
Losing a loved one is hard enough to cope up with. Nothing could ever replace the person that had passed away. It’s hard enough to deal with the situation already but it could get worse with the financial consequences that come with death. This is where life insurance can come in very handy. Although you are not preparing for your death, it is better to have one not for your own needs but for your loved ones.
Life insurance is a contract between the policy owner and the insurer or the insurance companies. In this contract, you have the capability to dictate who will be the beneficiary or the person who will benefit from the insurance in case something untoward happened to you or in case you died. Like any other insurance, you will have to pay for a premium. In exchange of this premium, the insurance company would give coverage on the individual’s death or other event like terminal illness or critical illness.
Realities like a death of a breadwinner can be tragic in so many ways. The emotional baggage does not stop with just the loss of your loved one but the survivors would have to face financial reality as well. Aside from the loss of the breadwinner’s income they are also faced with other expenses such as funeral expenses, estate administration, debts and estate taxes. Not to mention that fact that they also need income to continue their way of living, payment for mortgage or rents and college education for the surviving kids.
There are three periods that a survivor has to go through to. They are the dependency period, survivor’s blackout period and the survivor’s retirement. In the dependency period, funds or income needs to be available during the time that it is especially hard for the surviving spouse to work and provide for the family. Considering the economy right now, it is really hard to be a single parent. The survivor’s blackout period on the other hand is what they usually call as the widow’s blackout period. Here, social security will stop paying for the surviving spouse because there are no more dependent children. And lastly, the survivor’s retirement, if the surviving spouse does not have her own retirement plan it is hard to find ways for providing funds.
With all that discussed, this is where life insurance becomes the solution for those dilemmas. Off course you can also take advantage of savings and investments made by the deceased if there are any. However, since we can’t predict the future, it is better for us to be prepared and get a life insurance. A life insurance can provide the money that a surviving family needs for continued security especially when they need it the most. It gives a new source of cash flow and income to the surviving family so they will continue to live comfortably even after the passing of the breadwinner.
Those are only the death benefits of a life insurance, as in the benefits of the beneficiaries when the insured person dies. What others don’t know is that it can also provide benefits for the policy owner while they are alive. You can get cash values as the policy gets older. You can also use it as a security deposit in cases where you need to have loans or withdrawals. Or you can benefit from it through retirement planning. A life insurance can also offer practical solution during retirement.
In this life, we will never know what will happen next. We may have some assumptions, but when reality hits, it’s better to be prepared not only for our own needs but more importantly, for the ones that you value.