Life Insurance vs Car Insurance – What is More Important?
When it comes to insurance, most of the people tend to think about the expenses that are associated with the policies. If you have analyzed the cost of life insurance vs car insurance, you would realize that the cost associated with life insurance is much lower when compared to the cost associated with car insurance.
On the other hand, most of us have had the dream of becoming the owner of our own car from the childhood. When we finally reach that dream, it is our responsibility to provide maximum protection to it. That’s where car insurance comes into play. In fact, car insurance has been made compulsory by the law as well.
Let us first have a clear understanding about adequate life coverage. If you are the bread earner of your family, it is important to take necessary measures in order to take care of your financial obligations. Otherwise, there won’t be anyone to provide financial assistance to your family during an emergency. That’s where life insurance would come into play.
Thus life insurance can effectively be used as an income replacement tool. Without proper life insurance, your assets and investments will have to be liquidated in order to cater the financial obligations of our family.
When you are obtaining life insurance, it is extremely important to estimate the sum assured properly. Otherwise, you will not be able to get the right amount of money to your hands in case of an emergency.
The pure term insurance plans are in a position to offer a high coverage to you at a relatively low cost. The main objective of purchasing insurance is to cover all the risk factors that are affecting your family. When you sign up for a term insurance policy, you are charged a premium in order to provide coverage to the risk associated with your life for a given period of time. The policy would accumulate no cash value during this time period. In other words, the premium you purchase would offer protection only at your death. This can be considered as the main reason behind the low cost associated with pure term life insurance.
It is important to compare the cost and cover that you can experience from car insurance and life insurance as well. Car insurance is associated with a limit and it cannot exceed the showroom price. As a result, the premium is calculated based on the Insured Declared Value. This amount keeps on reducing on every year. However, the premium associated with life insurance would depend on your income. Therefore, it can keep on increasing every year. Therefore, you cannot expect a direct relationship in between the costs associated with car insurance and life insurance. With life insurance, it is all about realizing the value of your own life, but auto insurance is determined by the value of the car you buy.
