Insurance Blog
Nikita Trainin

Nikita Trainin

Financial Adviser

10 Reasons Why Life Insurance Should Be an Essential Part of Your Financial Plan

Most people in NZ have heard of or already have a life insurance policy, so it is not a new thing. Investing in life insurance is a big decision that many people face. It can be difficult to decide whether or not it makes sense for you and your family. But understanding WHY life insurance is important can help you make an informed decision about what kind of policy best suits your needs. Here are ten reasons why life insurance should be part of your financial plan.

WHY # 1: Protects Your Family’s Future

Life insurance helps protect your family’s future by providing them with the funds they need in the event of your death. This money can help cover funeral costs, medical bills, daily living expenses, and any other debt you may leave behind.

WHY # 2: Provides Financial Security

With life insurance, you can rest assured knowing that your family won’t have to worry about money if something happens to you. This security helps ensure your family will be able to maintain their current lifestyle without having to make drastic changes to cope with the loss of income from your death.

WHY # 3: Helps Cover Final Expenses

Unexpected expenses can add up quickly after someone passes away, so having life insurance helps cover those costs so that your loved ones don’t have to worry about them during a difficult time.

WHY # 4: Allows You To Leave an Inheritance

You may want to leave something behind for your children or grandchildren—life insurance can do just that by providing them with an inheritance when the time comes. This ensures that they don’t have to face any additional stressors during an already difficult time when grieving the loss of a loved one and trying to adjust financially without the income source provided by you before passing away.

WHY # 5: Helps Pay Off Debts

If you pass away before paying off all of your debts, including the home mortgage, life insurance can help cover them so that they don’t become a burden on your family after your death.

WHY# 6: Great Estate Planning Tool

Life insurance can also be used as an estate planning tool. It allows you to pass on assets without incurring additional taxes or delay due to probate proceedings. Plus, it can provide liquidity for estate settlement costs so that heirs don’t have to dip into their own savings accounts or take out loans during this difficult time.

WHY #7: Retirement Planning

Life insurance can also be used as an additional tool in retirement planning by providing a lump sum payment upon death that can be used for retirement income or other purposes as desired by the policyholder’s beneficiaries.

WHY #8: Covers Medical Bills

Many people do not realize that life insurance policies can also cover medical bills associated with terminal illnesses or accidents leading up to death, which offers additional peace of mind in knowing that all medical costs will be taken care of should something happen unexpectedly to the policyholder before they’re passing away.

WHY #9:Gives You Peace Of Mind

Knowing that your family is taken care of if something happens to you will give you peace of mind and allow you to focus on more important things in life. You won’t have to worry constantly about their financial security if something were to happen because the right amount of coverage can provide them with enough funds for years after you’re gone.

 WHY# 10: Tax Benefits

Life insurance policies are generally tax-free when proceeds are paid out as death benefits after someone passes away so there won’t be any additional burden on your family during this difficult time in their lives either financially or emotionally due to taxes they would otherwise have had to pay out of pocket if there was no policy in place.

As we can see, Life insurance is an essential part of any financial plan as it ensures your family will be taken care of even if something were to happen to you suddenly or unexpectedly. There are many different types of life insurance policies available, but it is vital to find one that fits your unique needs and stage in life. There are several dangers of taking the policy which is wrong for your situation, which I will write about in my next blog. With advice from an experienced financial adviser, protecting your family with life insurance can become part of your long-term plans for financial security and peace of mind. Don’t wait until it’s too late, let’s chat today!

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