Do you want to secure your beloved one financially or you may face difficult situation if your life partner passed away. So it is better to plan before struggling in the future. Buy the best life insurance product by consulting an insurance advisor. But keep in mind life insurance is not for everyone, some people would not benefit anything instead of premium amount or some may get more profit. Before buying, consulting right person and making proper decision is mandatory. It mainly involves whether to get life insurance or not.
It also important to weigh the benefits or drawbacks of Term vs Whole Life Insurance Consider these pros and cons while purchasing life insurance and you can analyze whether you get more benefits than what you pay as premium amount.
Pros of Private Life Insurance:
- Life Insurance is an Asset
Purchasing private life insurance is an asset not an investment. It is just like other insurance policies like health, vehicle insurance and many other; to make sure in case of any serious illness and you are not in a position to pay the cost of your illness. It makes sure that your dependency can lead a life without any financial crises despite your absence.
- Avoids Paying Huge Tax
One of the main reasons why many people run behind the life insurance policies is to avoid the tax. Many countries allow you to offset the premium amount that you pay for it in taxable income. Even the maturity amount you get when you claim the policy is also non taxable. So many financial expert advises to buy life insurance policy to get rid of tax burden. Any of the Top 20 Life Insurance Companies are very well known to the tax collectors.
- Government Regulations Provide Safety
The government regulations take the responsibility of the insurance companies to make sure that your insurance companies have enough assets to pay for your dependency in case of your death. Unlike the private banks, the government makes sure that insurance companies don’t fail or bankrupt.
- Fixed Premium Amount
One of the major advantages of private life insurance policy is fixed premium amount. So policy holders need not to worry about a rising premium amount in the future.
Cons of Private Life Insurance:
- Purchasing Policies When It Is Not Necessary
Many people will be more eager to buy the life insurance policies when it is not necessary. For example, A person at the age of 60 planning life insurance policy instead of going for the health insurance policy. This is what happening in most of the case. So it is better to buy the life insurance at your young age itself.
- Less Opportunity for Poor Health
People who are suffering from poor health issues are unlikely to get the benefit of life insurance for reasonable premiums. Because in this situation there will be limited opportunities for policy holder to make a profit.
- Buying Expensive Policies
Many people will not cross check with the premium amount and terms when they buy the policy. Later simply they fall into the trap unknowingly. Even some people buy policies which will be more expensive and burden.
- Coverage Period
Usually, life insurance policies cover limited period of time. Few polices are there for only one year or for five years increments up to 30 years. However, there are more options to renew the policy.
- Uncommon Payout for Death Benefits
In reality, majority of private life insurance policies never actually results on maturity amount. That’s why it is mandatory to consider some aspects like why you should buy life insurance policy and how likely you will be benefited from it.
Purchasing the life insurance policy is not a big deal, but insurance companies made it complicated to understand for the common people. There are many insurance products which are difficult to understand. There are several forums that advice people on How to Buy Life Insurance. But having basic knowledge about insurance terms will be helpful when you are purchasing any insurance products.