السبت، 7 يوليو، 2012

Life Insurance

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Life insurance could be the most unselfish investment you will ever make.
Many say that you never personally benefit from life insurance, though we disagree. When you have life insurance every day you have comfort in the knowledge that when you do pass away your family will be looked after - which is good for your peace of mind.
When you pass away, life insurance provides a lump sum payout to your beneficiaries.
You can add other types of insurance to your life insurance - like total and permanent disability insurance that pays out a benefit early if you are totally and permanently disabled or serious illness insurance that pays when you have one of the specified serious illnesses. You can even have cover for your children. These insurances will be covered further in future articles.
The advantages of bundling these insurances together with your life insurance include - having only one premium to pay - and insuring them all with the same insurer you will generally receive a discount or other advantages  - just like you receive benefits for insuring your house and car with the same insurer.
So exactly how does life insurance work?  Well let's look at the example of John and his wife Mary.
John and Mary were married in their twenties. Before they got married they started preparing their financial plans, which under John's parents recommendation included life insurance for both of them.
John worked as a bank manager and Mary as a nurse in a nursing home.
At 33, Mary passed away during child birth. It was a huge shock and totally unexpected. Thankfully the baby survived.
Mary had her life insured for $350,000 - about 10 times her income. John and his new baby Louise put the money to good use. It was invested in some income producing managed investments and the income generated was used to pay the bills that Mary's income used to cover.
Louise now has a nest egg for her future, to help with her education and when she wants to move into her own home.
Many families only insure the life of the main income earner, though both parents should be covered.
When someone passes away there is a lot of regret and emotion. There are also a lot of unpaid bills. By insuring both parents, your family can be financially secure when the unexpected occurs.

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