Saturday, January 1, 2022

Pros and Cons of Life Insurance | Advantages and Disadvantages of Life Insurance

Pros and Cons of Life Insurance | Advantages and Disadvantages of Life Insurance

Introduction : What is Life Insurance?

Life insurance provides financial benefits to the insured or his dependents in the event of death of the insured and other physical hazards. The purpose of life insurance is to protect a person from any harm that may result from disability or old age. Life insurance is for a specific period of time. In the event of the death of the insured within that period, the total agreed value of the insured will be vested in the dependent or nominee and if the insured survives till the expiry of that period, the value of the insurance policy and the benefits will be paid to the insured at the end of the period. 

Pros of Life Insurance

  1. Life Insurance make a peaceful mind
  2. Life Insurance ensure protect of your family and dependents
  3. Normally life insurance is Tax-Free
  4. Loan Facility in an Emergency Case (In the event of an emergency, you can get a loan by pledging your insurance policy. Here a loan is given for a certain amount of the value of your life insurance)
  5. Life Insurance is an Investment (The money invested will be reimbursed to you or your family at maturity or in the event of death. So life insurance is a good investment)
  6. It is a kind of pension (You can use life insurance as a monthly income after retirement. If the annual policy pays a premium until retirement, the insurance company will pay you the monthly income after retirement)
  7. Life insurance make you attention of life responsibilities
  8. Easier to apply and comparatively cheaper than other insurance plans

Cons of Life Insurance

  1. Policies of Life Insurance are normally complex (Policies of life insurance are different and depend on according to insurance company. However normally those policies are very complex)
  2. Insurance companies avoid offering many benefits of Life Insurance (They use many tips and tricks to avoid real benefits of your life insurance)
  3. It is difficult to predict the benefits you will receive from life insurance 
  4. It can be expensive if you are too much old
  5. Often the insurer does not get a chance to reap the benefits (However, family members are entitled to benefits) 

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