Life Insurance is as necessary at breathing air, and that’s a point that still needs to be driven home given the fact that there are still millions of uninsured people in the world. The problem is that most people find it too morbid to think about, let alone discuss and actually act upon. The truth is that most people do nothing until it’s too late, and their families are left with an immediate financial burden and little to no recourse. While you consider the seriousness of a financial impact that comes with death, allow me to provide you with some little known facts about life insurance.
Men are definitely in the majority when it comes to the individual being insured, but there are statistics that show that married women may actually out earn their spouse. This shows you that in the event that something happens to the wife the household would actually be worse off financially. It doesn’t matter who the breadwinner is necessarily, if you depend on dual incomes in the household then it’s vital to secure both streams of income. It’s important to note that 7 out of 10 households do rely upon dual incomes.
If the morbidity of life insurance bothers you, or you are superstitious and worry that by somehow taking out a policy it will jinx you, then don’t bother. It was found that out of all universal life insurance policies sold, only 12% resulted in any sort of claim. Considering how few people actually sign up for policies, this number isn’t all that staggering.
Believe it or not, life insurance can actually be a nice tax shelter! As long as the policy isn’t canceled or lapsed, you can take cash out of a policy and use it tax-free. Of course this is dependent on certain types of policies and having one that is invested, as it is the growth on the principal that becomes tax-free.
It’s actually recommended that you purchase a policy worth 10 times your annual income. This may seem a bit extreme, but you need to consider the effects of inflation and the growing needs of your family over time. Children will get old and attend college, and your spouse will age and the need for medical care will almost certainly grow. Not to mention the continuing home and auto payments that may be outstanding.