Contrary to popular belief, you don’t need to start thinking about life insurance only when you are old. In fact, you should start thinking about life insurance much early on in your life. There are various types of policies available today that can you choose from. Life insurance is a financial product that is based on the consideration that no one knows what the future holds, and thus, being financially insured ensures the financial well-being of your dependents.

You wouldn’t want your family members and dependents to be in any kind of financial constraints in case something happens to you. If you are the only earning member in your family, then it only becomes more important for you to have an insurance policy with sufficient coverage for your dependents. Here are the few reasons why you need to buy a life insurance policy today:

Providing for your family

If your family is dependent on you financially, it is vital for you to be insured. It would mean that in case of your demise, your family would get sufficient finances to move on in their daily lives without any immediate financial constraints. Starting from paying for mortgages to children’s education to other living expenses, everything can be covered through life insurance.

Debt

If you buy the right insurance policy for yourself, it will become much easier for your family to pay off any outstanding loans and debt in your name. It includes home loans, auto loans, personal loans, and more. When you have the right kind of insurance policy that offers sufficient coverage, your family will be in a better position to pay off certain debts without any issues.

Achieve Long-Term Goals

Some insurance policies come with investment benefits, and it means that they would get you lump sum cash on maturity. If you have invested in such life insurance policies that come with maturity and investment benefits, it will help you achieve your long-term goals, like going on a world tour or buying a new home or a car.

Peace of Mind

One of the biggest reasons why so many people buy life insurance policies is for the peace of mind that it offers. When they know that their family wouldn’t be in any immediate financial danger in case something happens to them, they can rest assured. It also can help in reducing stress in your daily life, enabling you to focus on your job more efficiently.

Tax-Saving Purposes

Life insurance policies come with tax benefits, and the premium you pay towards the policies are tax-exempt. So, you need not worry about the liability because the proceeds of the insurance policy are also tax-free.

In businesses, there is a key person life insurance policy available which helps in ensuring the top management tier of the company or the leader, depending on the value of the person in the company. In case something happens to the person covered with the key person life insurance policy, the business gets the sum assured that helps them stay afloat and find a replacement.

Overall, it can be said that there are various types of life insurance policies available out there, starting from term life insurance policies to investment-linked life insurance plans and much more. You need to choose the one based on your lifestyle, income, number of dependents, and other factors in order to ensure that your family is financially covered in your absence.

When you buy life insurance, it’s hard to determine how much you’ll need later on in life. Each year our lives can drastically change, causing us to review and rethink some of our expenses and insurances. Life insurance is one coverage that should evolve as you evolve.

Depending on your coverage, you may want to consider either increasing or decreasing your coverage according to where you’re at in life. There are certain signs to pay attention to that may tell you to reconsider what your life insurance policy is.

You Have Children

If you bought life insurance before you had kids, it might have been suitable for that moment in life. However, if later down the road you started to have children, your insurance may be outdated.

When we buy life insurance, it’s more for your family’s protection than anything. They would be the ones who utilize the death benefit if you passed away. If you have children, they’ll likely need more money to help cover costs and continue with life.

Your Health and Lifestyle Changes

Your lifestyle and health could be a sign that you need to either increase or decrease your insurance. The downfall, however, is that if your health declines, it will cost you more in monthly premiums. Americanterm.com has more information on how your health, like weight, affects your life insurance.

You Purchased a Home

If you recently moved into a new home, that is a good time to review your life insurance policy and consider increasing the death benefit. Moving into a new home can be expensive for quite some time. If you suddenly passed away, would your family be able to afford the mortgage and continue living there? Would they have to move out and look for something smaller?

The death benefit can help your family cover costs that your income used to help with. By increasing your coverage when you purchase a new home, you’re helping to guarantee that your family will continue to live in the family home.

Increase in Income

Have you gotten a raise recently? That is a good sign that you should look at increasing your life insurance policy.

Ask yourself this – would your family be able to live without your income? If the answer is no, you know that you need life insurance to cover the loss of the primary income. So, if you got a raise, you’ll want to increase the death benefit so that it matches you and your family’s lifestyle.

Fell Into Debt

Debt is one of the main reason why some families get life insurance. The death benefit could help cover the debt left behind a family member that passed away. Even though that family member is gone, the debt still has to get paid.

If you fell into debt recently, you may want to consider increasing your coverage for the time being. The more debt you have, the more that will fall on a family member if you suddenly passed away.

Life Insurance

One of the main reasons that lead people to take out life insurance is to provide a beneficiary with the proceeds of the policy when the named insured passes away. However, many times, there is more than just one beneficiary and here is where confusion takes place. If you are considering buying life insurance, or if you have already a life insurance policy, this reading can help you to clarify what is contingent beneficiary and how to add this beneficiary to your life insurance policy.

• Understanding the Different Types of Beneficiaries

Know there are not as many type of beneficiaries to make more confusing this topic, but there are certainly two types of beneficiaries: primary and contingent. The primary beneficiary is entitled to receive the proceeds at the death of the insured person and this beneficiary can be a specific person or a group of people that is properly called a class designation.

A contingent beneficiary, or secondary beneficiary, is entitled to the proceed of the insured individual only if the primary beneficiary passes away before the insured person, and it is possible add more that a contingent beneficiary to a life insurance policy to make sure there will always be a beneficiary that is going to receive the proceeds.

• Why a Contingent Beneficiary is Often Necessary

The primary beneficiary could be anyone, but often the closer is the relationship between the insured person and the beneficiary, the more important that is adding a contingent beneficiary or beneficiaries to a policy. In example, if you are too young and single you might be entitling your parents to receive your proceeds, but eventually you can marry and add your spouse as contingent beneficiary, and then your children as tertiary beneficiaries or vice versa.

• Who Will Receive My Proceeds?

Either in wills or in life insurance, the primary beneficiary is who receives all the proceeds or assets that the person who have died has left. A contingent beneficiary will not receive anything unless the primary beneficiary dies before the insured person, and yet subsequent beneficiaries will not receive anything either unless both the primary and contingent beneficiaries pass away before him or her. Attorneys and life insurers may help you to find a workaround to make possible all the beneficiaries receive a part of the assets or a proceeds share, but this situation needs to be discussed directly with them to leave everything according your wishes.

• Adding a Contingent Beneficiary to Your Policy

You can add a contingent beneficiary at the moment to take out your life insurance, or at a later time. Insurance companies will let you know about the importance to review and update periodically your life insurance policy, moment at which you can request the addition of the contingent beneficiary. Updating your beneficiary designations can happen as often as you need to make changes, but keep in mind that in some states is only allowed name your family and relatives as beneficiaries, and that naming children will require that you appoint a tutor or guardian until they reach adulthood.

Helpful Articles:

http://www.benefits.va.gov/insurance/

http://en.wikipedia.org/wiki/Life_insurance