Why Do We Need Life Insurance?
Before deciding on whether or not you should buy a life insurance plan, it is important to know what life insurance actually is and how it can benefit you. Life insurance is basically a contract between an insurance company and the insured person, where the insured (insurance policyholder) agrees to a monthly or yearly payment to the company and in return, the company gives out a lump-sum amount also known as ‘benefit’, to the insured, upon his death.
Now the question is whether you need a life insurance policy or not. To put it simply, if you are supporting someone financially and your death may cause them to suffer financially, chances are you should have a life insurance plan. There are numerous scenarios where a good life insurance plan will come in handy. Let us discuss some of them:
You are single:
Most people would think they don’t need a life insurance plan because they are single, young and have a long life ahead. Whilst this might be true for most, there are exceptions to this. You might have aging parents or siblings that might be left in a difficult situation if you are no more. Life insurance compensation would help them stabilize after you’re gone. Also, you would get better rates when you buy your insurance plan at a young age.
You have a spouse:
It’s a common mistake many people make thinking they only need life insurance when they have kids. What if something happens to you before that? How will the rent and all other expenses be provided for if your spouse is not covered financially? It’s best to have a life insurance policy in place to secure your husband or wife’s future after you’re gone.
You have children:
It goes without saying that as you grow older and have kids, your expenses increase significantly. You have to pay for their food, school, book, college etc as they grow up. Life insurance will give you the peace of mind that your kids can manage all those expenses after you’ve left them.
Nigeria has seen a steady increase in the rate of heart diseases and diabetes, etc., so it is becoming increasingly important to have a good insurance plan in place that will protect you and your family. Life Insurance companies in Nigeria are also offering plans that will secure a person against chronic and terminal illness which can be of great help if a person is unable to work and earn a living due to severe health conditions.
A good investment:
Deciding whether or not you need a life insurance plan can be tough, especially when you’re young, but it doesn’t have to be so, if you’re aware of the benefits. Life insurance can actually be a really good investment as the money can give you better returns in the long run compared to traditional investments.
Life insurance can seem like an additional cost when you are young and carefree but it is an investment you should make nonetheless because life is unpredictable and you do not want your loved ones to be left in a weak financial situation upon your death.