What is life insurance?
A life insurance policy is essentially a contract with an insurance company. Of premium payment
In return, the insurance company makes a one-time payment known as ‘death benefit’. This payment can be paid by the insured’s family after death.
Life insurance will protect you and your family from future risks. And it will pay for your family’s future expenses after you retire or die. In that case, life insurance is a long-term investment.
The amount of insurance payable will depend on the insurance class you purchase. Moreover, you can decide how the money will be spent, or whether it applies to a particular case (mortgage, rent).
The amount of money you have to pay for life insurance depends on many factors. Such as the amount of money you want to keep for the family or the extent of the life insurance policy. It also depends on your age, health and lifestyle.
There can be different types of life insurance. Usually the person selects life insurance based on his needs and purpose. Let’s not know the two basic types of life insurance.
- Term life insurance insurance): This type of insurance can be operated for a specified period of time, such as 5 or 20 years. This insurance is less expensive than permanent life insurance. This insurance can be used as an alternative to your lost potential income (Lost Potential Income). And it will help you meet your family’s financial goals, such as paying off a mortgage, running a business, paying for education. But keep in mind, although this insurance is called as a possible income option, it only pays for one time. The benefit of term life insurance is that your family is financially self-sufficient so you don’t have to spend money on insurance.
- Life insurance: Life insurance is a type of permanent life insurance. There is no fixed term for this insurance. Life insurance is more expensive than term insurance. Here the insurer has to pay for the life insurance premium. Upon the death of the insured, his or her family will be able to enjoy the specified amount of insurance. So now, think about how much insurance you will have for your family’s future financial guarantee.