Question

Explain the difference between purchasing life insurance on yourself versus someone else. Do you perceive the purchase of life insurance for yourself, as self-betrayal?

Answer 1

Purchasing Life Insurance is one of the most important financial decisions.It is the safest and most secured way to protect your family or dependents against financial contigencies that may arise post the unfortunate event of your untimely demise.Expect for the death benefits,a life insurance plan also provides maturity benefits.It acts as a financial net for an eventuality linked with human life,such as retirement,disability,accident,death,etc.The best insurance policy is a plan that adapts insurance buyer's needs.

In the case of purchasing life insurance on someone you must have an insurable interest in that person.To purchase a life insurance policy on someone else you need to prove insurable interest,or prove that you will financially suffer in the event of their death

You can buy life insurance on yourself.This is the most common way of life insurance purchase but you don't actually buy the coverage for yourself,you are the insured person,but the coverage provides a death benefit for someone else.For eg,Your spouse or child.

Generally when people buy life insurance,they are applying to be both the policy owner and the insured individual on the life insurance policy,and plan to name one of their dependents as the beneficiary.But there are some occasions when it may make sense to purchase a policy that insures someone else and names you as the beneficiary.While completely legal,purchasing a policy on someone comes with its own set of stipulations.You can't take out a policy on just anyone,you need to have the individual's permission,and you must be able to show insurable interest,which is basically proof that you will suffer financially if they die.

Life insurance purchase can be perceived as a self betrayal.Betraying yourself may seem like a small price to pay for the benefit of fitting in with the crowd.They are primaryly concerned about how they appear to others.They are willing to deny their own preferences to avoid discomfort and to avoid taking responsibility for their own choices.Insurance is a financial protective shield which comes to your rescue during uncertain times.It is the safest way to protect your future income from the risk of your dying before you have earned it.