Life entails risk, it always has and it always will. The risk of illness or death presents the potential for financial losses for the individual and/or his family. People used to rely on their extended family when a catastrophic event occurred but now there are some affordable solutions. You can choose to take on all of the risk yourself or you can share some of this risk with an insurance company.
What happens if I don’t live as long as I expect?
Life insurance is intended to fill a financial need that arises with the death of the individual on whose life the insurance has been placed. A full assessment of your financial situation is recommended before any type of recommendation can be made. Common types include universal life insurance, whole life insurance and term life insurance. Generally, the death benefit under a life insurance policy is paid tax free to a named beneficiary. This is an invaluable tool when developing an estate plan.
Benefits of designating a beneficiary
However, there are benefits to having insurance proceeds paid to a deceased’s estate as well, such as having significant liquid assets available to pay for tax liabilities upon death.
What happens if I can’t go to work due to an injury, sickness or critical illness?
Disability insurance provides a regular flow of cash when an insured individual suffers a disability as outlined in the policy that prevents him/her from working and earning an income.
Critical illness insurance pays out a one-time lump-sum benefit if you are diagnosed with a critical condition as defined in your policy, and you satisfy the survival period.
There are no restrictions regarding how you use the funds.