What is life insurance? In simple terms, life insurance refers to the contract signed between two parties known as the insurance policy holder and the insurer. Under this contract agreement, the insurer makes a promise to the policy holder (the beneficiary) to pay a given sum of money (benefits) when the beneficiary’s death occurs.
What life insurance means to you is that in the event of your death, your family will be paid by the insurer and therefore saved them the pain of financial hardships that will often result after your death. Life insurance policy can also mature upon other factors such as terminal illness or any other critical illness that renders the beneficiary unable to provide for the his family’s daily needs.
Life insurance contracts involve a process through which the policy holder has to pay a premium in either a regular basis or in lump sum. This premium is paid throughout the life of an individual and often, the policy matures for payment upon the death of the policy holder.
What Are the Benefits of Life Insurance?
Why do you really need to have a life insurance policy? Some people have never taken a life insurance policy because they have never known the magnitude of its importance in their lives and the lives of their loved ones. As much as there are many benefits of taking life insurance, here are some of the most significant benefits of life insurance policies.
1. Peace of Mind
As the life insurance policy holder, you will have the peace of mind in knowing that in the event of death, your dependents will be taken care of. For the residents of Philadelphia who wish to have a peace of mind, it is advisable to get a life insurance policy in Philadelphia. This is also due to the many risk factors that can cause death and leave your family with financial constrains.
2. Provides a sense of Security
In the face of the uncertainties of the present world, life insurance ensures that those whom you love most will continue enjoying a good life even after you are gone. It thus provides a sense of a secured future for your loved ones and any other dependencies.
3. Assists in making future plans
Life insurance is an investment that not only provides financial support in the face of untimely death but also enables successful future plans. The money can be used to meet goals such as the education of children, their wedding costs and also building a home for your family.
4. Helps in Mortgage Redemption
Life insurance has been tested and proven as the effective tool that covers for mortgages and loans that had been taken by the policy holders. Life insurance policy ensures that your families do not fall liable for your loans and mortgages after your demise.
5. Offers a window for long term savings
Because life insurance is a long term form of contract where you have to pay a fixed amount of money during defined periods, it develops the spirit of saving in an individual and has been rightly viewed as a form of long term savings for the policy holders.
Types of Life Insurance
Life insurance comes in different forms and each life insurance company has its preferred type of life insurance. Here are some types of life insurance policies:
1. Whole life Insurance policy
Whole life insurance refers to a type of life insurance where a part of insurance premium pays for the insurance while the remaining bit is used in form of a tax free investment. In whole life insurance, the premium is set at the beginning of the policy and does not change all throughout the life time of the policy. For this reason, it is easy for cash to build up during the life of the insured and this cash will either increase the death benefit or can be released during the course of the policy.
2. Term life insurance Policy
Term life insurance policy on the other hand is based on premiums that do not change throughout the life of the insurance policy. However, with term life insurance, the policy ends when the insured person has attained a given age. For term life insurance, there is no cash build up and as such, the death benefits in this policy will not build up.
3. Variable life insurance policy
In variable life insurance, premiums often start as low payments at the initial stages of the insurance policy and increase as the insured person grows older. For the variable life insurance, a cash build up occurs only as long as the mutual funds that had been chosen by the insured individual have a good performance.
Philadelphia Life Insurance
Just like any other part of the world, Philadelphia too has life insurance companies and we are one of the leading life insurance providers in Philadelphia. This is because we ensure that when you pass on, your family will live on to have financial security.
The number of those willing to invest in life insurance in Philadelphia is always growing because people have discovered the benefits of having a life insurance policy especially with us. With life insurance, you will never go wrong especially on your future plans and investments. It is the only way to fulfill your future dreams for your family even if your life is cut short and you are no longer there to provide the finances for your family. We will also ensure that we fund the specific financial goals of your family and it is for this reason that we have come to be known as the best insurance company in Philadelphia.
Always remember that life is full of uncertainties and the only way you are ever going to secure your future and the future of your family is through saving for them now and preparing them for the uncertainties of the future by getting a life insurance policy. As you will come to learn, financial security is not instant but takes years of saving through avenues such as life insurance.