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Friday, 20 September 2013

Life Insurance: A Long Term Investment for Retirement

A question that always comes to mind is if Life Insurance is a need or a necessity or a want. Some prefer to describe it as a financial fall back in times of old age, something to keep ends meet and a way of pulling out the needed financial support to manage daily existence as that of basic needs, medical maintenance and medical health. It can also be considered as a form of financial shield, a well configured financial long term plan that we put ample time and effort in investing while we are still capable of paying the premium cost, though it may be hard for most average earning people who can barely suffice the needed funding to fulfill their payments, It is still an very practical and well worth long term investment that can make a very big difference when the time of need arrives.

Life Insurance Investment is real time economic protection that provides our families with the much needed financial back up in the event of unsuspecting and unexpected adversities such as death. Anyone who is anyone can avail of these Life Insurance plans as they come in various categories ranging from comprehensive life plan coverages to retirement benefits. As compared to the olden days of Life insurance, today's Insurance Providers have aptly devised ways and means to customize their clients investment portfolios to cater to their needs. Besides pre-needs and post-life insurances, Life Insurance can also be applied for the continuity of a certain business to operate in the event of the demise of its primary owner or business operator, or aptly called Estate Insurance or Estate Planning.However, Life Insurance must not be considered as an investment contrary to some Insurance providing company's marketing pitch, Which makes some companies adverse packaging of their plans to woo in people who want to put up policy investments for retirement purposes.


How Does Life Insurance Work?”

Life Insurance is often offered to high income earning individuals, professionals and people who have their own stable income generating business. It is a way of setting aside additional earnings or extra disposable income which is more aptly meant as a secure way to confirm their own financial security when the time for retirement arrives. Even though the person might have already bought existing Insurance policies from other providers or other than any such insurance or retirement plan such as the 401 (k). 
 
The Insurance Provider will usually indicate how your Policy will work for your advantage:

It usually starts when you purchase a Policy that includes underlying investment plans that will self-generate the needed cash up to the time that your Policy “ripens” or “matures”. This means that the amount of money that you put in by paying your Monthly, quarterly or even annual premium will exponentially multiply by the time of your account with them matures. Maturity means that once you had met all premium payments needed to complete your Policy requirements, there will be no further need for you to pay anymore as you can just sit back and relax.

At some points that the adversity of the situation requires you to seek financial help, you can always turn to your Insurance policy and ask for a loan, though other companies can provide this post premium service to their policy holders. Premiums require you to pay certain amounts that will last a certain period and once you completed all requirements needed by your insurance provider, you are pretty much in the home run.

Eventually, your premium payment will grow as your time of payment progresses onwards to your maturity date, and when such time that you have reached your date of retirement, you can now utilize your invested money guaranteed by your policy as a loan, tax free. The amount that you loaned can be disregarded as your Policy provider will not oblige you to pay it back. The catch comes as a surprise for most policy holders as they find out at the end that the consequences of taking out a loan under the coverage of your plan that is a provided privilege of all policy holders means a consequential reduction of death benefits! Now this is an accepted Insurance Provider practice that has been instigated since the conception of the Insurance Industry. If you feel obligated to use your own insurance money because you have no obvious choice, chances are your final policy benefits that you signed up with your Policy provider will be debited on your account, therefore reducing your original expected benefits!


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