Simplistic Truths about Life Insurance

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Life Insurance and Investment Never Mix

Life insurance is often sold as an investment product, because people don’t like the idea of paying up money which they may never see in their life time. However, every good insurance agent will tell you that investment and insurance should never be mixed up. Non-participating plans like term life insurance policies pay out the sum assured if the policy holder passes away during the policy period. These policies are very cheap. But if the policy holder expects to get a return on his premium paid, the insurer raises the premium paid because they have to pay out a certain sum when the policy ends. Insurance experts advise that policy holders should keep insurance separate from their investments. A major part of investments should be available to keep up the well-being of the policy holder while he is alive, while the payout from an insurance policy would give financial support to the policyholder’s family in case of his death.

Life Insurance is a Shield against Price Inflation

Inflation is both a friend and enemy for your finances. Inflation pushes up the costs of goods and services over time, but it also ensures a decent living wage for the working population. A typical life insurance policy has fixed premiums over the period of its term. So, a policyholder in San Antonio could choose to assure his life for a sum that is sufficiently large after considering inflation by taking a life insurance in San Antonio. The insurance company too does the heavy lifting, by adjusting premiums against policyholders’ expected lifespan.

Life Insurance Protects the Well Being of Family Members

In the event of a policy holder’s untimely death, financial problems could overwhelm the surviving family members. It could be a joint loan that needs to be repaid, or bearing the costs of education for growing children, or even hiring the services of caregivers to take care of little children or elders. These future worries never get enough attention because human tendency is to postpone pessimistic thoughts while the going is good. However, the payout from a sufficiently large life insurance policy could help the policyholder’s family get through these troubles for a period of time. The presence of a life insurance policy itself is a matter of reassurance for family members because they do not have to scramble for money from investments to tide over immediate expenses. Some families even struggle to give a decent funeral because of the high costs. In a way, while life insurance is not investment, it helps protect investments from getting depleted in the event of an emergency caused by a death in the family.

Employer Coverage is not Enough

Some people get group insurance coverage provided by their employer based on their salary levels. However, the payout may be comparatively lesser compared to the employees’ current working abilities. So, it is not sufficient to rely simply on employer provided life insurance (https://www.wikihow.com/Choose-Life-Insurance). There is also a myth that only one life insurance policy is possible. Policy holders can have multiple life insurance policies, though they should inform their insurers of their other policies in the interest of transparency. Secure your life with effective retirement solutions in San Antonio with life insurance.

Don’t Let Bad Health Keep You from Getting Life Insurance

It is true that life insurers give their cheapest rates to young customers. The reasoning is that such policy holders are in the best of health and are expected to pay their premiums for a reasonably longer period of time. However, there is a myth among the general population that insurers deny policies outright to policyholders with medical problems.  In case the policy holder has certain medical problems, the premium gets adjusted upwards. In a few cases of life threatening disease, the policy could be denied. It’s always best to get a clarification from the insurer and to be upfront about disclosures when filling out the paperwork.

Insurers are fast at Processing Claims

Insurers are closely regulated by Government bodies and customer organizations. They are under scrutiny and have to regularly disclose details of claims accepted and denied to the insurance regulator. The investments made by these companies are also disclosed. They are also required to clearly inform policyholders about the claims procedure to be followed by the nominated person or surviving relatives.

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