Life insurance is one of the most common types of insurance taken out by a normal resident of Canada. It ensures that the beneficiaries of the policyholder are financially stable after the demise of the insured. A life insurance policy is easy to obtain and can give you a good coverage with low monthly incomes. It is true that we can have more savings if we don’t buy a life insurance. But these savings may cost your family heavily after your demise. Hence, it is advisable to get a life insurance. Here are a few benefits of life insurance:
1. It helps keep your family financially stable: The most common benefit of life insurance policy is that it provides a source of finances for your family even after your demise. Taking this policy becomes somewhat mandatory if you are the sole breadwinner of your family. It can help them to stay worry free about where the next meal is going to come from.
2. Cash value of the policy: The life insurance policy can be considered as an asset. It holds a value of its own and can be sold to receive the value of the policy in cash during emergencies. This can be considered as a benefit to the insured before their demise. It can be cashed out at any point and the sum you have paid against the policy will be received by you.
3. It has tax benefits: Life insurance policy, whether term or whole, are tax free. They allow you to store money for yourself without having to spend a portion of it on tax. This actually proves to be really helpful as you can save money twice now. One, by investing in the policy and one by not paying tax on it.
4. It is flexible: The policy is really built by you. Life insurance can be formed in such a way that it benefits you in the way you want. There are options to covert to whole if you are unhappy with the term life you have taken, or you can add other additions to it and make it more beneficial to you.
5. Lump sum is received: When it’s time to cash out the policy, you will receive a lump sum amount, and this can be immediately put to use by your family to pay off debts or mortgages or even finance education.