Do you know anyone who needs life insurance the most?
Introduction
The waves go high and strike the bottom low at some moment in time. The fact that our lives are so fragile and uncertain cannot be altered. It is just how nature works. Immortality is still a myth. The foremost obligation of a breadwinner is to safeguard the present and future of loved people.
Life insurance is an instrument to do so. Life insurance is a contract between the policyholder and the insurance company that commits to providing a lump sum amount of money for a regular premium amount paid to it.
The money is received upon the death of the insured person or a set period of time. The benefits can later be claimed to spend on debts/loans, education, everyday expenses, mortgages, and compensating financial dependency.
Who would most likely need life insurance?
The importance of financial planning cannot be emphasized more. As every family is different there is no end to variable factors that determine the quantity of money required. Taking into account factors such as household expenses, future education capital, debts, emergency funds, rent, taxes, bills, etc. you need to clearly plan the overall size of insurance and premium amount.
However, a plain-spoken idea is that the person who earns for the family and on whom other people are financially dependent should be prioritized. But this is not the only condition you should buy life insurance.
Parents with young kids – It’s the moral responsibility of the parent to complete the financial needs of the child till he/she is capable of doing it on his/her own. Unless you have big savings that can feed your family members you should rely on insurance.
Only earning member of the family – Your absence should not make your loved ones weak financially. Food, expenses, bills, and rent can be paid by the insured amount.
Older adults – Adults without good savings during their retirement time might need life insurance to cover cremation expenses and provide a little support to legal heirs.
Business owners – Insurance can be used to pay the debt, estate taxes, agreements, and other finances.
Single parents – As the only parent, it gets crucial to provide financial security to the baby.
Unmarried individual – You don’t necessarily need a family to start insurance. It is better as early as you start.
People with loans – The insurance amount can be used to pay debts so that you don’t pass the burden on to other generations.
How much is a million-dollar life insurance a month?
A million dollars might sound very overwhelming. On average $1 million term life insurance would cost around $40 – $45 per month given you are young and in good health condition. Other factors like coverage, gender, age, health, habits, etc will determine how much you will pay.
For a 10-year term and 30-year male old monthly premium will be around $30 and for females $25. On the other extreme for a 60-year male, 10-year term insurance would yield $155 on average, and for a female $125. Usually, it is recommended to buy insurance 10 to 15 times the annual income.
Again, the amount of money you will need depends on your personal situation. If you are young you will need a larger lump sum for future obligations and if older you might need comparatively less.
Do you know anyone who needs life insurance the most?
Is it legal to have two life insurance policies?
Yes, there are no constraints on the number of policies an individual can hold as long as he/she pays the premium. However, if a person is opting for a second insurance policy it is necessary to inform the company with valid reasons.
For bigger financial needs, additional expenses, or an increase in the number of family members it can a good option to take multiple policies. It is important to regularly pay the premium and keep both insurance policies active.
Conclusion
The false preconceived notions regarding life insurance policies can prove to be a great financial blunder. It is therefore advised to secure the future of your family members so that you can take less stress about it.
The type of policy, premium amount, reimbursement method, etc. should be carefully planned. If you have any sort of financial dependents then you are the best person who needs good insurance cover.