1. Provide financial protection to heirs:
According to experts, the sum insured of life insurance participants in the event of death is estimated to be equivalent to 7 to 10 times your annual income. If you have a policy that big, the people who depend on your income (the heirs) don’t have to worry about their living expenses.
For example, from your insurance policy, the heirs can cover the costs of their children’s education until college.
2. Cover the cost of death:
Every person who dies definitely needs money for the repatriation of the body. Moreover, if the person dies in a state of illness or accident. If before the person dies, they already have life insurance, then the costs for the funeral process can be covered so that it does not become a burden on the family left behind.
Keep in mind that the nominal death coverage may vary according to the premium paid and the policy of the life insurance company.
3. Get coverage for chronic illness:
The next benefit of life insurance is that it can cover the cost of care while undergoing chronic treatment. This applies if you are diagnosed with a disease that includes a terminal illness and are expected to live less than 12 months. As long as the person concerned is still alive, this condition can take advantage of the benefits of life insurance for medical expenses.
4. Retirement savings:
Illustration. One of the benefits of life insurance is as retirement savings. (iStockphoto/Thanmano)
In addition to protection from the risk of death, life insurance is useful as retirement or old age savings.
For example, dual-purpose and unit-linked life insurance products can assist policy owners in accumulating retirement savings preparations. Usually, the premium paid is not limited to insurance purposes, but can also be an investment.
5. Tax free:
If the owner of the life insurance policy dies, the sum insured given to the beneficiary is tax-free. That is, life insurance payments are not considered income for tax purposes. Meanwhile, beneficiaries do not need to report the amount of money when they report their annual taxes. Those are some of the benefits of life insurance that you can get to provide more protection for yourself or your family.