WHAT IS LIFE INSURANCE ?
Life insurance is a contract between a policyholder and an insurer where the insurer agrees to pay a designated beneficiary a sum of money upon the death of the insured. This payment, known as the death benefit, provides financial protection to the insured’s family or beneficiaries by replacing lost income, covering funeral expenses, paying off debts, and supporting ongoing financial needs. Life insurance policies may also offer additional benefits such as cash value accumulation, which can be accessed during the insured’s lifetime. It serves as a crucial component of financial planning, ensuring peace of mind and security for loved ones after the insured’s death.
WHY LIFE INSURANCE IS IMPORTANT ?
Life insurance is important for several reasons. Firstly, it provides financial security to your loved ones in the event of your death, ensuring they can maintain their standard of living, pay off debts, and cover expenses like mortgage payments and education costs.
Secondly, life insurance helps to replace lost income if you were to pass away prematurely, supporting your family’s financial stability and long-term goals.
Additionally, life insurance can serve as a tool for estate planning by providing liquidity to cover estate taxes and other expenses, ensuring your assets can be transferred smoothly to your beneficiaries.
Moreover, some life insurance policies offer living benefits such as cash value accumulation or access to funds in case of emergencies or financial needs during your lifetime.
Ultimately, life insurance offers peace of mind, knowing that your loved ones will be financially protected and provided for even when you are no longer there to support them.
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