Why Life Insurance is Necessary

You may have heard about life insurance, but immediately dismissed the idea of getting it for a few reasons: it didn’t sound like the right thing for you; you didn’t think you needed it or maybe you didn’t see the point of having it. Asking why life insurance is necessary? Read on.

Before you completely make up your mind to reject the idea of having life insurance, ask yourself these questions: are you the breadwinner of your family? Will you be leaving behind dependents that are too young to take care of themselves when you die? Do you have a mortgage, outstanding debts and bills to pay? If your answer to what the above questions ask is ‘yes’, then you definitely need life insurance.

Why life insurance? You may ask. Because it will ensure that, even after you’re gone, your mortgage is paid off, your debts are cleared and your family is well taken care of. You may be able to see to these responsibilities while you’re still alive, but what happens when you are gone? This question is a cause for concern for many parents and guardians but it doesn’t have to be. Life insurance leaves your loved ones rest assured that, even after you are no longer with them, the financial part of their lives doesn’t have to change.

Two kinds of life insurance are offered in South Africa:

Why Life Insurance? – Whole Life Insurance

Whole Life ensures that your beneficiaries receive a payout once you are gone. Usually, life insurance companies pay out a specific sum of money at least 48 hours after a claim is made by the beneficiaries of a policy, which will assist them with funeral expenses. The rest can be paid out in one big lump sum or in instalments throughout the rest of their lifetime. Depending on the amount of money, this payout can leave your loved ones financially comfortable for a very long time. It’s no wonder it allows its owners the added advantage of investing in it – apart from the required yearly premiums.

Why Life Insurance – Term Life Insurance

Term Life, on the other hand, may not pay out as much as a Whole Life policy, but it is more affordable. As the name suggests, it is only active for a specific term, after which it expires. However, if the insured dies within that term, his/her beneficiaries receive a payout. Although this type of insurance doesn’t take any additional investments, the payout can still be of a significant amount. This amount is usually decided at the beginning of the contract by the policy owner. Apart from it being affordable, Term Life cover also ensures that you aren’t paying premiums for the rest of your life; it also gives you the option to renew its term once it has expired.

With Whole Life, however, there is the option of cashing in early if it suddenly becomes too expensive for you. Nevertheless, keeping up with your premiums and seeing any policy to the end assures you that you will leave something for your loved ones once you are gone. To get the best deal, make sure you get a life insurance quote from as many companies as possible.

 

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All info was correct at time of publishing