What Is A Life Insurance And Where Can I Get It?
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Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of the insured person or after a set period. The Life Cover secures your loved ones’ future by paying a lump sum amount in case of an unfortunate event. In some policies, you are paid an amount called Maturity Benefit at the end of the policy term. There are two basic types of Life Insurance plans -
- Pure Protection
- Protection and Savings
What is a Pure Protection Plan?
A Pure Protection plan is designed to secure your family’s future by providing a lump sum amount, in your absence.
What is a Protection and Savings Plan?
A Protection and Savings plan is a financial tool that helps you plan for your long-term goals like purchasing a home, funding your children’s education, and more, while offering the benefits of a Life Cover.
How Does Life Insurance Work?
Life insurance pays out either a lump sum or regular payments on your death, giving your dependants financial support after you’ve gone. The amount of money paid out depends on the level of cover you buy. You decide how it’s paid out and whether it will cover specific payments – such as mortgage or rent – or if it’s to leave your family with an inheritance.
Whose Life Are You Covering?
You can choose a joint policy or a single one.
- If you take out joint life insurance, the money will go to the surviving policyholder – such as your spouse. This is unless you made alternative arrangements.
- If you take out single life insurance, the money goes into your estate. So you need to decide who it goes to when you die.
- A joint life policy is usually more affordable than two separate single policies. However, joint life cover only pays out on the first death. Whereas buying two single policies would make sure there’s a pay out on each death.
How Do I Buy Life Insurance?
Premiums can vary, so it’s worth shopping around and comparing different quotes. You can get life insurance quotes from:
- banks
- specialist brokers
- comparison sites
- direct from insurers
- credit card companies
- independent financial advisers
- retailers, including major supermarkets
- mortgage providers
Conclusion
Life insurance not only covers the risk arising due to an unfortunate event, but also gives you additional benefits like tax benefits, savings and wealth creation over a period of time. The right life insurance plan from a trusted company can help one get long-term risk cover plus savings, i.e. dual benefits from one solution.
Also read: What Are The Requirements for Purchasing Life Insurance?
