|Savings. Image by Marcelo Moura, Stock.xchng|
I read this article by Dave carpenter which mentioned that according to a 2010 survey by LIMRA (Life Insurance and Market Research Association), 30% of U.S. households do not have any life insurance coverage whatsoever. In the Philippines, the statistics is lower. Daxim L. Lucas in his blog post wrote "Only 15% of Filipinos have life insurance."
Obviously, not everyone has a life insurance policy. So, is there a reason to be jolly about getting one? What are the benefits of having a life insurance policy?
1. It helps to plan for sudden loss of lives. Dave Carpenter said that parents with children under 18 years old should have a life insurance so that the children would not be financially distressed when the parents die due to unforeseen events.
2. It helps to shoulder the cost of your own death. If one's children are all grown up, the parents may still consider to have a life insurance to cover the expenses of their own funeral. This will alleviate the family left behind from the financial burden associated with death.
Basically, those are the two major reasons for getting a life insurance policy. However, I am surprised to know that there are different types of life insurance. I'm quite familiar with term life insurance for which a person pays a monthly premium for a certain period of say 5 years. When he dies during the term of the policy, the beneficiaries receive the face value of the policy.
3. It helps to have forced savings. Another type of life insurance is the permanent life insurance which is also called cash value policy. In this type of life insurance, you pay a higher premium than a term life policy but your policy accumulates cash value over time. This accumulated cash value can be withdrawn, borrowed or used to pay the premium by the owner. Some of the types of permanent life insurance include the whole life plans, universal plans and variable life plans. Though this may not be the best way to invest or save money, it can be an option.
Not everyone can afford to purchase a life insurance plan. But for those who can and who want to, it is important to know which plan best fits your budget and your needs. Talking to a consultant in this field and getting life insurance quotes from reputable life insurance companies can help you make your decision.
What do you think about getting yourself a life insurance policy?