What Are The Benefits Of Buying Insurance For Life Insurance?


Michael Foote
What Are The Benefits Of Buying Insurance For Life Insurance?

We all take risks in life, but some are greater than others. If you suffer a financial meltdown suddenly or are physically impacted in some way, without the proper coverage, you or your family could be left out in the lurch. 

The main reason you may be wanting to save up is to provide a safety net for your family should misfortune hit. In this situation, a savings account is limited in what it can achieve. Life insurance is the ultimate rainy day fund. For a solid level of protection, life insurance is a better option in my opinion because of the versatility it can offer if structured properly.

Whole-of-life vs Life savings

A life insurance policy is not actually a fund, it’s a contract between the policyholder and the policy provider. It should be thought of as an usual form of a crisis fund which is only accessible if the worst of the worst should behold the one whose name it is in. The fundamental reason why life insurance is incredibly attractive is, because it is inherently a large payout. It’s more the likely that you will opt for a policy which is tailored to fit your needs and circumstances, rather than a generic scheme such that’s recommended to you by a mortgage company.

The payout process

A termed policy will only cover you within a certain period of time. Therefore, a guaranteed payout when you pass away is termed a whole-of-life coverage plan. As you might imagine, the premiums are considerably higher as you’re insuring against an event which is definitely going to happen but may not happen for a long time. If the insured, did have such a policy, the added bonus is that it will cover the future inheritance tax bills. Beneficiaries are most commonly paid in a lump sum after a review process.

Selling the lump sum and why

If you as the insured or the beneficiary chosen would like insurance on the lump sum, you can also opt for a ‘sell my structured settlement’ option. Selling a lump sum over a set time period or all at once, can give you a guaranteed steady flow of income until the day the settlement holder also dies. The reason why a structured settlement is sometimes a better way to control the money is because, the lump sum left by the deceased may not be enough or last long enough with the loved one who inherits it. Therefore the structured settlement can actually supersede the value of the lump sum and the holder not pay more than the sum itself.

The process of picking the right company

The first thing you should do is request a quote from a few funding companies. Once you accept the best offer, you will sign a contract that outlines the terms and conditions of the sale. At this point, you’ll have to send the funding company a copy of your annuity contract if you haven’t done so already. An attorney will then file a petition for the settlement transfer; usually at your local county courthouse. A hearing will then be set by a judge to hear your request. If approved, the chosen funding company will start the steady stream of income payments within a 2-week period.

 

Michael FooteWhat Are The Benefits Of Buying Insurance For Life Insurance?

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