Importance of Life Insurance for a Family

Importance of Life Insurance for a Family

Introduction

Life Insurance is referred to a contract between an insurer and an insurance policy holder. In this contract, a promise made that the insurer will pay a sum of money to the insured person upon his death to a designated beneficiary. Life insurance is very important for a family as it provides mental satisfaction to individuals (Dinallo, 2009). Individuals who possess a life insurance policy are satisfied because they know that they will be receiving a particular amount of money at their retirement or after their death, their family will be having a particular amount of money to live a respectable life. The main focus of this paper is to identify the importance of life insurance for families. The thesis statement for this paper is that “Life Insurance is an asset for families.”

Discussion

Life insurance is considered as an asset for families members because it serves as a predictable asset for unpredictable times in family. There are numerous benefits of insurance policies to individuals. There are various people who have discussed the reasons of the importance of life insurance for a family. It is very important to understand that whether it is important to purchase an insurance policy or not (M.A. Co., 2009) It is researched that the answer to this important question is yes. It is very important for a family to understand the benefits that a family could receive after purchasing an insurance policy. It is observed that insurance policies provide a huge benefit to family members; this huge benefit is referred to as peace of mind. This is a very important benefit that a family receives from an insurance policy because mental satisfaction is received as an individual knows that he will be receiving a particular sum of money to deal some unpredicted problems and issues (Giarmarco, 2012). The approach that was selected for identifying the importance of life insurance to families is that a life insurance is a living benefit that a family receives. The core benefit of life insurance is that it provides a security for protecting the future of the family form the financial perspective. After researching different articles written by many experts and individuals that they also view the importance of life insurance from the same perspective as I do. Different articles also provide us with the information that life insurance is very important for a family to protect its financial future. It has been noticed through studying various articles that there are some very prominent benefits that a family receives after purchasing a life insurance policy. Some of the most important and significant benefits that a family receives after purchasing a life insurance policy are mentioned as follows.

Liquidity - This is a very important benefit that a family receives that the death benefits are directly received in cash form. It includes no income tax, management fees or transfer costs.

Easily divisible - This is also a prominent benefit that the insurance amount could ...