5 Benefits of taking a life insurance cover
For most of us if not all the beauty of our hard work is being able to build a legacy for yourself or for your loved ones. For lasting peace of mind and protection, life insurance solutions help provide good savings options for your retirement, investment desires and also securing the future of your loved ones. Life insurance covers guarantees a right coverage that offers valuable combination of both benefits and protection.
Nonetheless, it all begins with personal commitment since protection and peace of mind comes from long-term commitment through payment of premiums so as to keep your cover in force. Taking a life insurance cover is like repairing a leak in your roof, the longer you wait the more expensive it gets. You have to realize, today you are a day older than yesterday, and meaning, the older you get the more costly the coverage gets. You can choose to buy a cover later at an expensive price or buy a cover today at an affordable price as this depends on both age and health status.
So, some of the reasons for taking a life insurance cover include:
1. Protection and Peace of mind
Lasting peace of mind is a priority for most, being in a state of tranquility knowing that you and your loved ones are protected and assured in case of anything is luxury that is enjoyed by a few. If you have a family, you are the dependent of your extended family or rather have a business, life insurance cover acts a financial safety net.
Let’s face it, death is inevitable and in as much it’s hard to talk about, it something real and will come eventually. Thus, upon the demise or Permanent Total Disability of the policyholder, the listed beneficiaries get a lump-sum payout that is paid in full (with the condition that all premiums are paid and one has no outstanding loans). In this case, the protection aspect comes from the advantage of having a secured plan that one can count on to helps sustain the policy holder upon maturity or the loved ones when needed.
2. Disciplined Savings.
Unlike other financial platforms, a life insurance cover offers an effective and disciplined way of savings. In that, one is in a position to set aside a specified amount for a specified period without being able to withdraw regularly. Nonetheless, the notion that most people have that Insurance companies refuse to return funds has to be a problem of understanding, in that, the refunds are made upon attaining surrender value.
Different life insurance solutions have different surrender values, ranging between 24 to 36 months. In addition, unlike other financial institutions, life insurance solutions gives an individual guaranteed cash value growth, in that, it offers high interest rates on savings with additional cash bonuses upon payment of premiums.
As one pays premiums, the life cover build value that is guaranteed to grow tax deferred and help the policy holder achieve a variety of financial goals. For instance, • Payment of School fees • Paying off mortgage • Purchasing a plot • Protecting existing assets • Building up on an emergency fund for an individual and their loved ones.
3. Tax Relief
With increased taxes in the country, there has grown a need for people to diversify on ways to protect their funds and on the same note maintain a good record with authorities.
In this case, life insurance cover that pays for more than KShs. 5000 guarantees a policy holder 15% tax relief that is reverted back to them. Nonetheless, the cover has to be of a minimum term of 10 years an above for one to be eligible for tax relief.
On the other hand, beneficiaries enjoy every penny that is attached to the cover as this policy is passed along income tax free of charge.
4. Policy Loan
Life insurance covers act as additional financial asset, in that, in case one needs a loan, the policy cover can act as security. In most cases, this policy loans require no collateral, no guarantor and interests is lowered based on reducing balance.
For eligibility of the policy loan, the policy holder should have attained surrender value, and ensure all premiums are paid for 24 to 36 months.
5. Additional optional riders
There are various ways to tailor your policy to suit your individual needs. For an additional cost on premium, one can purchase additional protection, for instance, chronic illness, personal accident, last expense, accidental death, waiver on premium on disability, waiver of premium on critical illness among others.
All this optional riders can be explained by your agent and with their guidance, one can be able to select a rider that is of best fit to the interested party.
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