The following is my answer to a Quora
question: “Why
do I need life insurance?”
A life insurance policy is a financial
instrument. And like anything, it is a
matter of whether you know how to use it, or you do not. In general, the primary purpose of any life
insurance policy is estate planning. The
average person has family and others who survive him, and he sets aside
something so that he leaves a legacy for the living. Even in the event that there are no
benefactors, it is possible to leave money for a foundation or a cause so that
our good name lives on long after we have passed.
Disability and critical illness plans pay
out upon claim so that you are not a burden to others in your illness or
incapacity. Critical illness can
bankrupt an entire family, because more than one breadwinner is often lost. In addition to the claimant, it is conceivable
that someone else in the family has to leave their job to take of you, even if
temporarily.
Finally, medical insurance is a need in an
age where medical inflation is in double digits. You either have to be very wealthy, or deluded
to not believe in the importance of a hospitalisation plan.
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