What is Life Insurance?
Life insurance is a legal contract between an insurer and an insurance policy holder where the insurer promises to pay a certain amount depending on the policy a sum of money upon the death of the insured person. In simple words it can be said that life insurance provides financial protection to the family of the insured person upon the death of the insured by paying a specified amount of money to the family in result for regular payments over a period of time. The three main types of life insurance include Term life insurance, Whole life insurance and Universal life insurance. A life insurance time period varies from 10 years to 30 years depending on the company offering the policy or the kind of policy and the amount of policy.
Who Should Buy Life Insurance?
Life insurance policies must be bought by those individuals who are considered to be at the peak of their life and also by those who are having financial dependents ensuring they are secured after the death of the insured person. One must also look into one’s income level, premium paying capacity etc. Life insurances are not only to cover one’s life or secure a person’s life but it can also be treated as a savings carried on from a very young age up until their death or it can be to a certain age and later end the policy receiving the eligible policy amount. The younger or healthier a person is while under a particular policy, the more are the chances of premiums being at a lower rate making it a worthy investment to the person insured and the earlier one starts investing in life insurance, the safer are they and their loved ones.
Life Insurance Related Queries
Many of the experts suggest people to go with those life insurance policies which match their lifestyle. An expert can give a generalized opinion regarding any policy for that matter or can also suggest great insurance policies and its payout but it is on the person who ultimately decides on which particular policy to be chosen and which one to be ruled out. One has to decide any particular life insurance policy based on their income levels, their premium paying capacity; may it be monthly or half yearly or yearly once. It is also advised to the people to refer to an experienced insurance agent or a broker to obtain proper and genuine suggestions regarding which is the right type of cover for any individual.
Why Do You Need Life Insurance?
A life insurance is needed by a common for various reasons which include:
- Ensuring financial support to the immediate dependents of the insured person on the sudden demise of the person.
- Financing the deceased person’s educational needs and other day to day expenses for a few days.
- Having a constant source of income post retirement (Unit Linked Insurance Premiums).
- One kind of a savings plan.
- Financing other contingent requirements in the insured person’s life.