Reasons Why People Buy Life Insurance

Life Insurance doesn’t benefit the person who pays for it. There are various reasons why a person would invest in a life insurance policy.

Some of the main reasons are:

(1)Life Insurance to Pay Funeral and Burial Expenses: Even if a person has no dependents he might purchase a small life insurance policy to make him pay for the expense of his/her funeral , burial or real estate taxes which are costly procedures which cut the expenses of friends and family or other charity.

(2)Life Insurance Supports Family and Dependants: The first reason that people buy life insurance is to safeguard their family’s finances against future in case a person happens to die. This insurance is intended to pay out enough money to support one’s family even if the person’s death becomes a major winner for living expenses, mortgage payments and even children’s college tuition. The larger the payout the more costly the plan. Sometimes cheap life insurance falls when it is most needed as the cheap life insurance policies might have conditions and exemptions which allow insurance companies to escape payments.

(3)Life Insurance to Protect Business: Business owners and managers take out life insurance policies on themselves to protect business in which they have invested a big amount with energy and attention. It is possible to insure business partners to pay out business in event of death. The insurance is meant to offset the estate taxes which could otherwise force family to sell the business at a loss.

(4)Life Insurance as a Retirement Investment: Whole Life Insurance is often called as an investment or savings plans. This type of insurance offers policy holders the option of cashing out in part or all of their insurance plan at some point before their death and receiving cash instead of insurance pay to their survivors. This insurance is just called as a waste of money. These policies often charge a premium for both insurance plan and investment while paying out one of them.

(5)Life Insurance to Give to Charity: People who don’t have or want there families to get insured using life insurance take out such a life insurance policy where they make their policy to give out to charity. This kind of gift is a way to give final donation which is such a big amount which many people can’t afford to give away.

There are many reasons why people buy life insurance. Out of them the most common is securing a safe financial future for any family members and beloved ones. So buying a life insurance is a very best way to secure one’s future.