Why people buy life insurance ?

Posted: Wed Apr 15, 2009 11:57 am Post Subject:

I think most of the people buy life insaurance to safe guard the future of there young generation ...!!!

Posted: Wed Apr 15, 2009 01:18 pm Post Subject:

hey steven....... joint annuity is a kind of annuity that makes payments for the lifetime of two or more beneficiaries ... nothing much

Posted: Wed Apr 15, 2009 01:36 pm Post Subject:

adding onother point to the discussion .......
some life insurance policies also cover against the risk of having very serious illnesses. If the insured develops an illness listed by their insurer – such as a heart attack or cancer – a lump sum or regular amount can be paid out to cover, for example, loss of income.

Posted: Wed Apr 15, 2009 02:56 pm Post Subject:

akhi0001,
I'm going to take this apart for you: please pay attention.
So that we’re all on a level playing field here, let’s assume that in every case noted below, a policy owner/insured intends to keep a life insurance policy until their heart stops beating – whenever that might be.

People buy life insurance because:

1. Income replacement:

You are, of course referring to a dead person's income. Otherwise, you'd be talking about some type of disability policy. Which, by the way, is not life insurance. If money is EVER removed from a policy’s cash value, it generally lapses before the insured dies.

2. Saving:

Life insurance is not a savings account. Always remember that the cash value is nothing more than an over-payment of premiums and, by design, this money is almost always used to offset the ever increasing cost of insurance in future years. If you want a savings account, open one at your local bank and leave the life insurance policy alone.

3. To insure their lives:

BINGO!! You got that one correct.

4. To help their family to maintain financial losses if he is no more:

I think I understand what you're trying to say here. If you meant to say that a family could use the money from a life insurance policy to maintain their standard of living if the primary breadwinner should die unexpectedly, you are correct.

5. Tax savings:

Life insurance is used for estate planning purposes and is often used to pay taxes. I'll give you this one as well.

6. Medical benefits:

Life insurance can be used to pay hospital bills after the insured dies. I suppose money can be taken from the cash value to pay medical bills as well. Provided, of course, the life insurance policy is no longer needed.

7. Children:

Yes, life insurance can be used to replace the income of a deceased parent.

8. Children’s education:

Because I've investigated (and seen agents prosecuted) for selling life insurance as a means of sending children to college, this is a “grey” area for me. I guess that as long as a parent understands they must die in order to send their kids to college, this one would work as well.

9. A marriage (I’m in California and everybody marries everybody over here):

If a girl’s father dies, the life insurance proceeds can certainly be used for her wedding. Had he remained alive, he would have undoubtedly paid for it anyway. Remember; if the father intends to keep the policy until he dies, money from the cash value should not be removed…….unless he dies soon.

10. To secure their lives:

This particular statement is quite broad, however, I think I understand what you're trying to say here and I agree with you.

Posted: Wed Apr 15, 2009 03:05 pm Post Subject:

Bhartiaxa

Now-a-days people also invest in life insurance as an investment perception. Because the returns of the investment are not taxable under Life insurance.

Posted: Wed Apr 15, 2009 03:07 pm Post Subject:

Life insurance can be used as a means to launder money. There's one you didn't expect.

Posted: Thu Apr 16, 2009 06:16 am Post Subject:

Super,

joint annuity is a kind of annuity that makes payments for the lifetime of two or more beneficiaries

Posted: Thu Apr 16, 2009 09:46 am Post Subject: insurance

INSINVESTIGATOR: GOSH!! I think you covered just about ALL the reasons to get Life Insurance. My concern, of course, is my 'offspring'. He's a Minor now, but, I have a 'Trust' set up for him. Funerals can be expensive. One of my 'Clients' had recently passed away and she had NO nsurance of any kind. Her family is trying to sell some of her belongings to pay for the Funeral. ..I think it's sad.

Posted: Thu Apr 16, 2009 12:22 pm Post Subject:

sdchargersfan, it's interesting that you say that your concern is your offspring, yet he is not the beneficiary of your life insurance.

A trust isn't very meaningful unless there is enough money in the trust. A trust can very easily have negative financial aid impacts when it comes to college.

Posted: Fri Apr 17, 2009 05:54 am Post Subject:

life insurance also play a key role in Covering Mortgage Payments for some families