Life is equally more important and that is why individuals opt-in obtaining either auto insurance or life insurance. However, over the past decade, there has been a significant rise annually of life insurance by 30 % as compared to auto insurance.
Does mean that life insurance has more benefits as compared to auto insurance yet they all cover human life? The coverage analysis of the two types of insurance would determine which of the two is better.
All this coverage depends on the type of insurance cover either in auto insurance or that in life insurance.
Auto insurance, for example, covers one from liable accidents that might occur with the car while for life insurance is a way of helping a family of an insured deceased cover any financial expenses.
Now the distinction is starting to be more clear in the sense that auto insurance is only relatable if one uses a car or owns a car while for life insurance it covers the life of both the insured and the family in case of a tragedy occurring.
The following are predominately justification as to why life insurance is equally better as compared to auto insurance:
1. Family Beneficiaries
Life insurance protects both the family members and the insured while for auto, insurance it tends to be one-sided as it protects only the car, the owner of the car and sometimes third parties of the accident.
For life insurance it does not matter on the type of policy that is there either whole life insurance or that of term insurance, they all have the capabilities of providing benefits to the family.
Those family benefits re of wide coverage, which can include educational expenses of the children, house allowance or a replacement of the spouse’s income. As for Auto insurance, these benefits are limited as it only protects the insured from finical ruin.
Now this means that auto insurance lacks family benefits as this type of insurance cannot pay for your children’s education and it can neither substitute your spouse’s income in any way whatsoever.
This, therefore, brings to the conclusion that many individuals would opt to get life insurance in Ontario as compared to auto insurance since it limited in terms of beneficiaries.
2. Tax Advantages
Life insurance offers tax advantages particularly when one takes the option of whole life /permanent insurance. In other words, obtaining a life insurance exempt one from tax by the government. The following represents when one is justifiable not to pay taxes:
a.Cash Value: This cash value increase in terms of investments. The reason being, the cash value is not as income-earning and thus tax exemption easily qualifies
Payments: Execution of payment that involves a large amount of money can be costly du8e to the taxes involved. Permanent life insurance, however; can easily evade this, as they can surrender their policies to pay the large amounts of money, in that if the money in the policy is less compared to the lump some money it is not taxable.
Payment to spouse: The amount of money a spouse earns especially to a permanent life insurance holder is not taxed. Neither federal income taxes nor estate taxes are put to the spouse.
To end this argument, therefore, it makes life insurance better than auto insurance considering the tax exemptions subjected to it. As for auto insurance, tax benefits are not there.
Auto insurance has an expiration date that is set to it, which means the renewal of the policy is necessary. If one lets the policy expire, and tries to renew it again, it then becomes a hard task down the road.
While as for Permanent, life insurance does not require any form of renewal as the contract does not expire and it is for long-term benefit and just the payment of the premiums.
Renewal of the insurance is time wasting in itself which then becomes a disadvantage in having auto insurance. Time wasting in that if one’s policy expires and unluckily the individual is involved in an accident that same day by the time the insurance company decides to releases a cover for the individual after the accident it would be already too late.
As compared to when one acquires life insurance especially the permanent one, where it will be available to serve one.
4. Loan Benefits
With life insurance, the insurance company can cover loans and debts that were initially borrowed by the insured if the individual is registered under life insurance and not auto insurance. Other than that, the insured individual enjoys no taxation on policy loans.
Meaning that an individual can borrow a policy loan to continue with the benefits of the life insurance cover. The policy loan that has been acquired is not taxed.
As for auto insurance, one is not able to enjoy the policy loan benefits in that if one is unable to pay the insurance one is easily subject to the cancellation of the insurance.
5. Saving and management of money
Modernity has encouraged impulse buying and overspending on unnecessary items. With the introduction of life insurance, it has encouraged the act of saving. A good example is that life insurance has enabled individuals to benefit after their retirement also known as the time of their golden years.
If an individual has been registered under life insurance and has been paying premiums deli gently with no-fail, then during his/her retirement one can enjoy partial income from the various insurance companies as a way of compensation.
However, as for auto insurance, it is very limited and does not subject anyone for that kind of benefit. In addition, life insurance encourages the habit of funds management, in that individuals are trained to manage and take care of their fund and avoid wasteful spending.
As seen, therefore it is evident to conclude that life insurance is predominately important as compared to auto insurance looking at the benefits and the wide coverage it has on an individual.
Auto insurance is only okay if you register for a comprehensive type of insurance because it offers at least wider coverage as compared to all the other types of insurance.
In conclusion, therefore before making that golden step in choosing the type of insurance on is looking for, it is better to consult and have more knowledge about the other types of insurance. This one can choose the type of insurance that best suits what he /she is looking for.
Author’s Bio My name is Norman Frisky, I’m currently working as an editor at the Insurance Hotline. We offer Online Insurance, Term Insurance, and Online Term Insurance. Our mission is to build a secure future for our Members by providing best products and benefits.