Often people take their life as granted and perceive that they would not die young. But death is an avoidable and uninvited event that can happen anytime. Therefore it is advisable to be prepared for it and opt for life insurance policy. The life insurance policy can not bring life to a dead person but yes it can help his family to survive financially.
If you do not have a life insurance then you are taking a major risk and especially so if you are the sole bread winner of your family. In then event of your death, your family might have to face financial crisis. However, when you opt for a policy, the assured sum is remitted to your family and thus it saves them from the financial crunch.
Under a life insurance policy, the insurer and insured party agree to a formal contract. Under this contract, if the latter dies, the former promises to pay a certain sum to the nominee, elected in the policy. The insured party has to pay a certain amount for a fixed period of time, called as premium, under the insurance policy.
Life insurance policy is considered to be important as it provides protection to your loved ones and saves them from mishap. Since death is a sudden event that can come in anytime, it is better to be prepared for it and secure your family’s future against the same. The loss of life can not be covered by the policy but yes the financial support does help at times like this. This way you do not gamble with family’s future.
Some of these life insurance policies mature after the insured party’s death while other may be realized before that. The latter are referred to as endowment policies and are treated as investments. These policies help you to grow your capital and are therefore beneficial.
There are three key factors that are to be considered when choosing an insurance policy. These factors are related to the face value of the insurance policy, the premium amount that needs to be and the sum assured that is remitted on the maturity of the policy.
The face amount of the insurance policy refers to the amount that you pay on purchase of the policy. Once you have purchased the policy, you need to pay a certain assured amount for a fixed period of time failing which the insurance policy is stands to be canceled and no amount is returned.
Different life insurance policies have offer different types of premium. In some of the policy, the premium is to be paid every year while in some other you may have to pay it for a certain number of years only.
Similarly there are different types of life insurance policies also. One refers to those in which the future of your family or the nominee is secured. But there is another life insurance policy as well which is treated like an investment policy. Under this you get to secure your own future. These policies mature on a predefined date or on the event of your death, whichever is earlier. In case you die before the maturity than the sum assured is give to the nominee or else it is given to you upon the maturity of the policy. The premium in this case, is to be paid for a certain number of years.
You can also withdraw the invested money after the lock in period. But when you withdraw the amount before maturity then you do not receive the full amount but only the surrender value which is calculated and then given to you. This can be useful at the time of financial crises.
Investing in life insurance policies is a good option. Some of the extended benefits of buying a life insurance policy are that it helps you save your taxes. If you are traveling abroad then the life insurance policies are treated as your saving and can help you get travel visa easily. So, if you do not hold an insurance policy now, then it is advisable to opt for one soon. You can also buy insurance policy for your family and secure their future.