subject: The Need For Life Insurance Cover [print this page] At times when money is in short supply, many people find it increasingly difficult to keep up insurance premiums. Short-term insurance offers more immediate benefits, especially when high crime rates are a fact of life. However, the reasons for taking out life insurance cover can become blurred, as any return can seem so nebulous.
As a reminder, life insurance provides some compensation for the loss of your most important asset: your own life. Although the chances of actually claiming are hopefully low, still this is a risk you cannot afford to take. It is impossible for most families to accumulate a reserve of assets quickly enough to provide a financial cushion for the loss of a loved one.
While life cover cannot (and is not intended to) compensate for the loss of a family member, it can help ameliorate the financial consequences of such a misfortune. It may, for example, make it unnecessary to sell a house when the market is down, because there is insurance on the mortgage bond. Or it may allow a business to be inherited debt-free. In fact, the list of ways this type of cover can help is endless.
It is the nature of most insurance that you have to lose first in order to win. But with an endowment included in the life insurance policy, this is no longer necessary. It then has a useful role as a forced form of saving, which has saved many people from the temptation to spend savings on daily living, and consequently has helped provide for education or a comfortable old age for many people.
The trick is not to look at the monthly outflow, but to consider it as a component in the foundation for a secure life. Without a good foundation, unexpected occurrences can cause all plans for life to collapse into rubble. Responsible people are concerned for their families, and wish to provide adequately for them, no matter what happens. Life insurance has an important part to play, and it is strangely appropriate that it was first developed by a minister of religion to provide for the families of ministers in the church.
All things considered, instead of being unable to afford life insurance coverage, the fact is that reasonable people cannot afford to be without it. It is impossible to know what exactly will happen in life, and this is a way of minimizing the effects of that uncertainty. Many families would have been destitute without the protection it can provide, and are always grateful for the power of sharing risks that cannot be borne alone that it provides.
by: Levi Wright
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