For some people, a major reason for beginning to prepare for life’s ‘what if’ scenarios is starting a family.
If your primary concern is taking care of your family, life insurance is an excellent option. It makes sure that your loved ones are supported financially, both now and in the future, as they cope with financial burdens that may come in case the unfortunate happens.
Check out the benefits of life insurance and some of your options if you’re thinking about getting it to give your family financial security.
Life insurance benefits
In general, a life insurance is designed to provide protection to beneficiaries in the event the policyholder dies or becomes incapacitated.
It offers a lump-sum cash payout to the beneficiaries you designate if you suffer from a terminal illness or pass away.
To be specific, life insurance provides the following benefits:
- It can give you peace of mind. By providing for your family in case of your death, disability or permanent injury or a serious illness, you’ll have more confidence knowing they’ll be financially secure no matter what happens.
- It can reduce the financial burden of a terminal illness. If you become seriously ill and rack up hospital and doctors’ bills, you can receive a payout, which can reduce your financial worries. However, to enjoy this benefit, you need to make sure your policy provides for this benefit.
- It is flexible enough to cover a range of situations and life stages. There are a variety of policies offered by providers to cover different professions and life stages. Most of them also allow for a range of benefits that policyholders can choose from.
Types of life insurance cover
Depending on your needs and priorities, you may opt for the following types of life insurance.
- Accident-only income protection: If you’re hurt in an accident and cannot work for longer than the waiting period, this insurance will pay you a monthly benefit of up to 70% of your average income.
- Funeral cover: This provides a cash payout that can be used to pay for the final costs of a loved one’s funeral expenses.
- Income protection: This typically provides a monthly payout equal to up to 70% of your regular income if you’re temporarily unable to work because of illness or injury.
- Term life: Although this form of policy offers a lump sum payment, it can also work as a salary replacement, so your family can continue living in the manner they’re accustomed to. They can also use it to pay off your obligations.
- Total and permanent disability (TPD): If you suffer a total or permanent disability because of a sickness or injury and cannot work, this type of insurance provides a lump sum payment to replace lost income, help with medical costs, and pay for recurring debts and bills.
- Trauma: This provides a lump-sum payment if you experience one of the serious ailments detailed in your policy. Depending on what’s covered, it can provide financial cushion if you experience a heart attack, cancer diagnosis, or stroke.
Unlike savings, life insurance provides your family with financial security immediately.
So, even if you’re saving and investing, consider getting a suitable life insurance policy today to ensure your family’s financial stability in the event of you becoming terminally ill, physically incapacitated, or passing.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.