Here are the Reasons Why Life Insurance is a Smart Investment

This digital age allowed bank transactions to be executed more conveniently and investment relations to be performed seamlessly. With information being readily accessible, more and more people are making more informed decisions in terms of their finances, investments, and even insurance coverage. Some have already invested in life insurance and here are some good reasons why it is a smart move.

Security and Peace of Mind

One of the biggest advantages of life insurance is security and assurance. If you are the breadwinner of your family, an insurance coverage ensures that they will have the financial capacity to get by when anything untoward happens to you. Keep in mind that your family relies heavily on you, especially if you are sending your children to school or if you are the sole income-earner in your household. For sure, you don’t want them to suffer financially when you are gone and this is where life insurance comes in.

In parallel to this, life insurance, when not used, acts as your savings, which you can utilize for your future needs such as your retirement. There are even life insurance policies that allow its patrons to be able to get a certain monthly income stream after paying for a particular number of years. There are instances wherein the clause of the insurance policy even waives the age of the insured. These types of policies give you the security that even if you are no longer generating income, you have the means to get by.

Apart from this, the life insurance coverage will also give you peace of mind. Come to think of it, death is inevitable and everybody will come face to face with death eventually. With life insurance, you somehow have the peace of mind that should anything happen to you, your family’s financial future is secure. Thus, not only is life insurance a smart investment, it is a clever move in general.

Financial Liabilities

Another reason why investing in life insurance is considered a smart move is because your life insurance can actually cover your financial obligations long after you are gone. For instance, when you take out a housing loan from a bank, they usually require a mortgage redemption insurance (MRI), which is a certain insurance fee that you have to pay to ensure that your loan will be paid off should anything happen to you as the debtor. In this case, you can use your life insurance as the MRI of your loan by listing the bank as your main beneficiary.

After the loan is fully paid, you can then update the beneficiary of your insurance and list any of your immediate family members or loved ones. In this case, instead of paying several years of annual fees for an MRI, your money is actually saved. What is even better is that should anything untoward happen to you, your family will not be burdened by any financial obligation you left such as a housing loan. Thus, investing in life insurance is considered a smart decision, especially in terms of your financial liabilities.

Source of Funds for Future Goals

Life insurance can also be your source of income for a long term goal, such as the education of your children and putting them through college. This is truly possible as long as you start saving early. More often than not, insurance policies give you an overview of how much your money will be valued after a certain number of years. It may be that after paying a couple of thousand dollars for more than ten years, the total money you put into the life insurance already earned a couple of thousand dollars more.

There are life insurance policies that allow you to take out the revenue of your money after a particular period of time, while keeping the capital to ensure that you still have the proper protection and coverage. This is a great way to secure funding for your child’s higher education or a business venture that you are keen to pursue in the future. It can then be deemed that life insurance is a smart investment that can be a source of funding for your long-term goals.

Tax Benefits

While common investment vehicles are subject to proper taxes and fees, life insurance provides you with a tax benefit. For instance, your family and loved ones no longer need to pay for taxes upon an insurance claim. In the same manner, when you intend to use up your money in the future, such as for your retirement or other long term goals, you are not required to pay the state in taxes. Thus, you will get your money in full. This is why, apart from being a smart move, investing in a life insurance appeals to more and more individuals.

Disciplined Investment

As the old saying goes, money that you don’t see is money that you don’t spend. Insurance companies who provide life insurance policies encourage their clients to make annual payments for their policies through auto-debit coordination with their patron’s bank. This is because annual payments are harder to miss compared to monthly payments which may be overlooked. At the same time, an auto-debit automatically deducts the money intended for the insurance payment from the insured, thereby ensuring that savings are set aside before the rest of the income is budgeted for other expenses. As a result, you have a disciplined method of building up on your savings without a miss.

To wrap things up, there are already several means to invest your hard-earned money and let it grow for your future use such as in preparation for your retirement. As such, one investment you can make is by putting your money in life insurance, where you will have the proper protection and coverage in case of any untoward scenario, in parallel with making your money grow. Thus, it can be deemed that investing in life insurance coverage is a smart move.

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