These days, more and more people want to build up a sound financial plan that will bring peace and order to their lives. Unpaid bills, debts piling up, forgotten purchases and unanticipated expenses such as dental and medical needs can make a real mess of finances and bring untold stress and agony to those without a solid financial foundation. More and more financial planners are pointing to life insurance as a necessary component of any sound financial plan. The following questions and answers will help to give a general overview of why life insurance may be important to you.
Why life insurance?
First of all, it is a fact of life that our need for human relationships often puts us in a position where we have much responsibility for many people. Mothers, fathers, grandparents, and even brothers and sisters find themselves in a position where others rely on their moneymaking power for food and protection. It is also a fact of life that accidents occur, illnesses strike, disasters loom up without warning. Life insurance is a way of insuring that the people you are responsible for will continue to live secure lives even in the event of your death. It is a way, so to speak, of continuing to be responsible for those you love even from beyond the grave. Lots of times, the benefits that your company provides, and the benefits your government provides, will lessen and change in the event of your death. Life insurance helps to assure that your family will continue to enjoy the benefits they’ve come to rely on through your hard work.
What are some other reasons for life insurance?
Death can be an expensive thing. Just the costs of burial can be astonishing. Purchasing a casket and a burial site can be more costly than purchasing a new car. Also, there are special taxes that come into play when a person who owns property passes away. There are lots of little costs that come up, and that, added together, can be overwhelming for a grieving family. Mere health insurance doesn’t usually cover the cost of these things. Life insurance, however, does. When you buy a good life insurance plan, you can not only rest assured that, in the even of your death, your family will continue to receive their basic food, clothing, shelter, and medical needs; you can know that the particular costs of death will be covered as well. There will be no sudden, financial surprises for your family, things not covered by your health insurance.
What is a contingent beneficiary?
A contingent beneficiary has two definitions. One definition of a contingent beneficiary is that a contingent beneficiary is the person next in line when it comes to inheriting the benefits of a life insurance policy. The life insurance holder has left the benefits of the policy to A, but if A dies, B is next in line. Another definition of a contingent beneficiary is a person who gets the benefits of a life insurance policy only if certain things happen. A contingent beneficiary in this case, for example, could be a person who can only receive the benefits of a life insurance policy if he or she goes to school, gets married, etc. Let’s say that your mom is set to receive all the benefits of your dad’s life insurance policy. But your mom passes away before your dad does. You, as the only child, might be the contingent beneficiary, that is, the person next in line. Or let’s say that your mom is the owner of the insurance policy. She names you as a contingent beneficiary based on your behavior. You’re not next in line in the case. In this case, the meaning of contingent beneficiary is that your mom wants you to do certain things if you’re to receive the reward. Your benefiting from the life insurance policy is contingent on you performing certain tasks.