Life Insurance: In recent times, you will find many agencies offering you, life insurance policies with certain benefits which may look attractive and you may want to opt for it. But at times, it is necessary to know the basics before taking it up. There are still a huge number of crowds who don’t understand the “exact” meaning of life insurance but choose to opt for it. There are sometimes when you do get guided to the wrong way. Thus, to eliminate any kind of doubts, queries, and uncertainties about life insurance, in this article we will discuss some of the basics that you need to understand properly.
What do you mean “exactly” by Life Insurance?
The basic meaning behind the term life insurance is you receiving a lump-sum amount of money instead of premium payments from the company with whom you have closed a deal on your life insurance. This payment, on the death of the person who made his life insurance, will be paid to the beneficiary’s name, which was suggested and approved by the insured person.
What are the different types of Life Insurance available?
If you go through the different plans, policies and the types of the life insurance available, then you will find that approximately there are around 5 different types of life insurance that are available. These 5 different types are mentioned below:
- Term life insurance: This is a life insurance policy offered by the corresponding companies, which will offer you all the financial coverages needed for a certain time period to the policy holder’s name.
- Whole life policy: In this type of life insurance, the policy holder needs to deposit a certain amount on regular basis, which all will be given back as a corpus to the family after his or her death.
- Endowment plans: In this type of life insurance, you get all the money back which was assured to be returned, before or after your death. As it satisfies you!
- Unit linked insurance plans: Normally abbreviated as “ULIP” is a type of life insurance in which provides a risk in the coverage of the holder of policy, all along with the investment options, which lets you invest it in many of the numbers of qualified investments.
- Money Back Policy: This is a two-in-one. The way it serves as a type of life insurance, it also serves as a plan of investment. It serves to cover the death of the person who opted for the insurance type which comes along with some periodic payments as a percentage of the sum initially invested.
What is the need for life insurance?
There are three major reasons for which it is recommended that you do apply for a life insurance policy. These five reasons are stated below:
- For the protection of your family as it is sort of a replacement policy of your income once you are dead.
- Helps in making your kid’s future solid through leaving an inheritance and makes sure they don’t have to go through a financial crisis.
- It also helps in paying off loans and debts which have been passed through many years.
Tips for choosing your life insurance policy
Go through the following easy steps which you are required to take and you may find the perfect life insurance policy you were looking for.
- Get engaged to an advisor of insurance as he or she can provide you an initial boost
- Calculate the coverage of life you are looking for
- Compare all the different plans of insurances and choose the best which suits you
Hopefully, now you have got your basics clear on what life insurance is all about. Choosing the best policy depends on what you want from the policy. So, be confident, take your time, consult with known knowledge if required and opt for the best.