Advantages and disadvantages of life insurance
Life insurance you should know that it has its own merits and demerits. Therefore you should always be ready of taking the risks. Life insurance offers several advantages not available from any other financial instrument, yet it also has disadvantages.
Merits of life insurance
- Life insurance provides an infusion of cash for dealing with the adverse financial consequences of the insured’s death.
Life insurance enjoys favorable tax treatment unlike other financial instruments like:
- Death benefits are generally income tax free to the beneficiary.
- Death benefits may be estate tax free if the policy is owned properly.
- Cash values grow tax deferred during the insured life time,
- Policy loans are income tax free.
- A life insurance policy may be exchanged for another life insurance policy without incurring current taxation.
- Many life insurance policies are exceptionally flexible in terms of adjusting to policy holder’s needs. The death benefit may be decreased at any time and the premiums may be easily reduced, skipped or increased.
- A cash value life insurance policy may be thought of as a tax favored repository of easily accessible funds if the need arises yet the assets backing these funds are generally held in longer term investments thereby earning a higher return.
- Preparing for retirement: Life insurance can provide the opportunity to generate cash value that can be used as additional income in retirement.
- Life insurance can help you negotiate a time when you have a serious health issue without having to deplete savings that are intended for your family’s future.
Life insurance policies provide:
- Security to families.
- Protection against loans.
- Keeps a check on the savings
Disadvantages of life insurance
- Policy holders forego some current expenditure to pay policy premiums. Moreover life insurance is typically purchased for the benefit of others and usually only indirectly for the insured person.
- Cash surrender values are usually less than the premiums paid in the first several policy years and sometimes a policy owner may not recover the premiums paid if the policy is surrendered.
- The life insurance purchase decision and the positioning of the life insurance can be complex especially if the insurance for estate planning business situations or family complex situations.
- The life insurance acquisition process can be annoying and perplexing e.g. one can ask himself questions like is the life insurance agent trustworthy? Is this right product and carrier? How can medical underwriting be streamlined?
Employee business analytics
As the cost of employee benefits continue to rise, employers are challenged with providing quality coverage at affordable price or employees and their family members. Life insurance helps its client’s precision performance solution to meet their diverse set of specific goals and objectives. By doing this people taking life insurance cover will be safer. This is done by:
- By improving the program’s cost structure, financial controls and management.
- Enhance the programs value to plan participants.
- Streamline vendor offerings and administration.
- Ensure program compliance and contractual obligations are being met.
- Educate plan participants on effective utilization of program offerings.
- Monitor results, prospective trends and potential strategies.
Our website allows clients to be able to compare insurance rates from different insurers. We normally ask for information that includes some basic information about you, your vehicle, your driving record, and limited information about any other drivers you’d like to insure on your policy.Our website provides you with actual prices from different insurers and not estimates like some websites. These different prices will assist you decide which one is the most friendly for you. With this comparison service we help you save both time and money through finding all the information you require in one place.