Life insurance is a type of insurance which is for the family rather than for the customer. Life insurance pays a person’s beneficiaries (usually their family) after the insured person’s death. This insurance covers funeral costs as well as living costs for the family in the event of a death. No one likes to think about life insurance because it may seem morbid, but there are many reasons why you might want to consider this type of insurance.
When something happens to a family member, the family not only grieves, but is also usually faced with a significant financial burden. Funeral and memorial arrangements can cost ten thousand dollars or more. There are often final medical costs as well, which can be substantial. Many family members need to take time off from work while grieving, which results in income loss. As well, if someone has personal loans, payday loans, credit card debts, and other forms of debt, these will usually have to be covered by the survivors. In many cases, an estate does not cover all these costs comfortably, but an insurance plan can.
As well, there are two types of life insurance, and some types of life insurance are an asset which insured persons can borrow against. These insurance policies provide an emergency asset which can be liquidated in the event of a financial emergency.