The foundation of life insurance is recognition of the value of a human life and the possibility of indemnification for the loss of that value. In other words, it's simply a mutually beneficial contract between two parties: an insured person (also called the policy holder) and an insurer. In this contract the insurer promises to pay a sum of money (also called a benefit payment) to a specific beneficiary. The insurer receives a premium from the insured for this service.
Benefit payments are made at the time of death of the insured person. Other expenses, including funereal expenses are sometimes also included. However, depending on the contract, other events including terminal or critical illness, rather than death, may also trigger payment.
Life Insurance Advice: Why You Need Coverage
Obviously, the only reason why anyone would seek coverage is because of the benefit to be derived from it. Here are several benefits that you can get from having an insurance policy:
1. Life Cover "Protects" You
Although life cover may not benefit you directly, but it is sure to give you a much-needed peace of mind, especially if you have dependants. You will definitely have fewer sleepless nights and less worry if you're sure that your family is financially protected now and in the future. Such a benefit cannot be disregarded since a 2006 study published in Psychological Medicine reveals that majority of people's worries (75%) concern the present and the future. Moreover, 25-44 year olds tend to worry a lot about financial and housing issues.
Another interesting fact is that having less worry just might help you live longer. This is based on a 2007 study by Purdue University, which revealed that people who were highly neurotic had a 40 percent greater chance of dying.
You'll have peace of mind when you purchase coverage that assures you of your family's financial security in case you pass on. You will also have no worries channeling your finances to meaningful investments, since you don't have any concerns about the future.
Moreover, you can also benefit directly from the benefit payments made out during terminal illness. In such situations, the doctor may asses that you have less than 12 months left to live. You definitely want to spend the remaining days without any financial worries. Hence a policy that includes this coverage will help you sustain your lifestyle and cater for your expenses.
2. Your Family Is Protected
The emotional turmoil caused by the death of a loved one is particularly traumatic. If this is combined with financial hardships, such a family may be completely devastated. Their living standards may drop, children may have to shift to low cost schools and personal property may be auctioned off to pay outstanding debts, among many other ill-fated inconveniences.
Wise parents will always consider the plight of their children in case they ever die. They ensure to buy sufficient coverage that will sustain the family and help them live comfortably just as if they were still there. Although no one can ever repair their loss, the financial security that you bequeath to them will be a true legacy that they will remember you by for the rest of their lives.
Kerrie Peacock understands the immeasurable value of life coverage.Those interested in securing their families future can consult MeCovered to take advantage of the most affordable insurance packages. You can visit www.mecovered.com.au/life-insurance-advice/ to help you select the best coverage.