You’ve probably heard about life insurance at some point but you’re not sure of what exactly it is and why you should arm yourself with one. Life insurance is a policy that promises to provide a monetary settlement for your loved ones in the event of the holder’s death.
A good personal financial plan should include life insurance, savings, and investments. It can be confusing to distinguish between the three because certain types of life insurance include saving and investing components.
Savings is the money that you set aside for emergencies or for big ticket items, and it is usually kept in a readily accessible account such as bank savings or money market account. Investments, on the other hand, produce a higher rate of returns than savings, and may not be readily accessible.
Life insurance, as mentioned earlier helps the policy holder’s family to settle its financial obligations, depending on the type of policy. For example, an education plan enables the parent to save towards the financing of their children’s education, while life savings plan gives you the opportunity to earn better interest on your savings and also get a free life insurance cover of up to ?1million.
Here are 6 reasons why you consider a life insurance policy:
Life insurance is an important part of financial planning. Getting a life insurance policy isn’t also necessarily about you, and so a life insurance policy shows that either in death or life, you’re with your family, ready to support them.