Knowing about the life insurance pros and cons
Why buy life insurance? In case, this question has been bothering you for quite some time, then it is important to know about life insurance pros and cons. This will help you get crystal clear idea on why life insurance plan is necessary for you. Additionally, you would also get detailed info on pros and cons of life insurance.
Pros of Life Insurance
Just as health insurance, it will cover you for illnesses and even under circumstances where you are not in a position to pay your medical costs. It will prove to be a saviour for your family if your life ends in a bad manner. The plan guarantees economic independence for your dependants despite your demise.
Life insurance in the United States provides benefit termed as ‘income tax free death benefit’. Additionally, no tax is charged on the increase in cash value over time. The beneficiaries can obtain a decreased tax burden. The policy holder can also cash on tax free benefits in the course of his lifetime. Beneficiaries do not require paying income tax on term and whole life cover reimbursements. Taxes will not be charged on borrowing money against insurance cash value. However, it is better to consult a tax specialist to know about specific tax benefits offered in your state.
This is known to be the best life insurance product as it is simple and inexpensive. A term life insurance policy represents a pure death benefit. It is bought to bridge gap till retirement to support families cover various debts, care their dependents, higher education for dependents, cover mortgage expense and even funeral costs.
In the United States, term life insurance will cover you till the time you have adequate amount for your dependents. You can easily buy life insurance for 10, 15, 20, 25, and 30 years depending on your age in US.
Universal and Variable Life Insurance Pros
Variable insurance facilitates you to change the premiums on life insurance. You can do this as per the situation in your life and budget aspect.
Cons of Life Insurance
You cannot enjoy the benefits of life insurance if you use it as an investment product. This is not an investment product as you won’t get anything in return in your life time.
Buying life insurance if you are not married or don’t have dependants or even when you have crossed 80 years of age is sheer waste of money.
Policies that are too expensive can prove to be waste of money.
About the Author