Can Insurance Policies Guarantee Your Future Financial Security?
When contemplating on your financial security including that of your family’s, the most common advice you will receive is about a variety of insurance coverages. The most basic of course is a health insurance policy, which most large companies provide to their employees. A car insurance on the other hand, is a mandatory requisite of car ownership and vehicle-driving.
While there are other insurance coverages that can help pay for unexpected financial burdens, their use in the future is contingent. Contingency is related to the happening of a fortuitous event or occurrence, which may not even happen at all.
Now here’s the thing, insurance coverages require payment of premiums that can reduce your current personal capital. So before you decide taking out a policy for any insurance coverage, make certain your financial resources are in order. You do not need to have coverage for all, but only on one that will let you feel more at ease, and to not let you lose sleep, worrying over “what ifs,”
Take a careful look at what each insurance policy offers and then take into consideration its relevance to your lifestyle, your location and your occupation. Have awareness that the premium paid determines the amount of financial fallback you will receive once the contingent event or condition is triggered. Simply put, the amount of coverage is proportionate to the amount of premium paid in keeping the insurance policy active and enforceable.
Also, know what opportunities will be available to you after years of paying monthly premiums. Can you cash out the policy if in case you decide you can no longer afford to pay the premiums?
How Does a Life Insurance Policy Work?
A life insurance policy is a coverage on your life to which the financial remuneration will be paid to the beneficiaries you designated in the insurance policy. Yet if your beneficiaries are already of age, have steady jobs and living comfortably on their own, getting a life insurance would be impractical.
The death benefits received from this policy is tax-free because the purpose is to ensure that the beneficiaries can continue to afford paying for basic needs in the event the policy holder dies. However, it’s important to note that the cause of death must be as a result of an illness or accident or a cause determined as not related to fraud or was not criminally motivated. Policies that include death by suicide are rare and requires payment of higher premiums and other legal requirements.
How Does a Long-Term Care Insurance Policy Work?
A Long-Term Care Insurance Policy is less fatalistic in its view of the coverage that will be provided to you. It actually works as a rider to a Life Insurance Policy, without requiring death as a condition to receiving insurance benefits.
The coverage entitles the policy holder to receive benefits that can be used in paying for assisted living costs. The latter refers to benefits that provide a policy holder with the means to pay for assisted living services in the event that he or she loses ability to carry out at least two daily activities on his or her own.
How Does a Disability Insurance Policy Work?
This policy will relieve you of financial worries in case a long term illness or accident prevents you from generating income to help you live comfortably/ However, this policy must be arranged while you are still in the best of health and physical condition. Moreover, the insurance company will also take into consideration your present occupation and the degree of disability risks you face in performing your job.