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Published On: Wed, Dec 28th, 2016

Life Insurance May Pay Off before Death

Insurance is usually is about protecting us financially from something we hope will never happen— a car accident, injury or illness requiring hospitalization or a house fire. We know death is going to happen, but life insurance is still low on the priority list among the various kinds of insurance and financial/investment plans.

Most of us don’t have enough life insurance and more than you’d think have none. That has been reinforced by various insurance industry studies, including the 2016 Insurance Barometer Study by Life Happens, a nonprofit organization, and the Life Insurance and Market Research Association (LIMRA).

Oddly, a lot more consumers recommend life insurance than actually have it. Fewer still realize that so-called cash value life insurance may actually be an asset, strengthening your credit rating and increasing your likelihood of getting a mortgage or other loan.

photo supplied, courtesy of guest blogging network

Life insurance is often deemed of less importance than car insurance, which is required, or homeowners, health or even liability coverage. The aforementioned study concludes that the death or loss of the primary wage earner would result in one in every three households having immediate trouble paying their basic living expenses— one of every two of those without life insurance.

Life insurance is actually less important today than other types of insurance when you consider, according to LIMRA, that almost three-fourths of American households paid for life insurance in 1960. Fast forward to 2010 and it was well below half of the households at 44 percent.

The studies show that far more people are concerned about having money for a comfortable retirement than making sure their loved ones are taken care of financially in the event of their death. Again, life insurance is far back on the priority list. Younger age groups, notably Millennials and Gen-xers rate long-term care higher than impact on dependents and loved ones in the event of premature death, according to the 2016 Insurance Barometer Study.

Obviously, this is not about being insensitive as much as worrying about taking care of the immediate needs of you and your family, paying the bills and making sure you are comfortable and cared for when you are old and grey and your children are, well, adults.

“Life insurance is unique in that it covers a loss that is certain to eventually occur: It is not a question of whether the policyholder will have a claim, but when,” report the experts at Growing Financial Benefits.

Cash-value life insurance, which includes whole, universal and variable life, is an asset and investments when premiums are paid regularly and earns tax-deferred interest over time. It represents a return on your investment without waiting for your loss to occur. There are even customized investment features in some life insurance plans.

Life insurance is more than a pay-off upon your death. It may also benefit you in life.  

Author: Anwar Hossain

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