Life insurance is an agreement between an insurance company and an individual. The insurer promises to give a certain amount of money to the beneficiaries of the deceased when he/she leaves this world.
There are two types of life insurance policies; term policies which have a pre-determined length of the plan. If you die before the period is over, your beneficiaries are compensated, but if the policyâs period is over before you die, you will not be repaid. Whole life policies insure you for your entire life and only compensate the beneficiaries once the fact that you can no longer breathe is proved. The main difference between term policies and whole life policies is that the latterâs premium rates remain constant from the day to take on the plan while in the former the prices are set a little higher every time you renew the policy.
However, depending on the terms of the chronic policy illnesses may trigger the payments. The insured has to pay regular monthly or annual fees for the claim to be honored.
Other reasons could cause the claim to be discarded; they are usually included in the policy terms and conditions. The most common goals include; suicide or suicidal causes, fraud, riots, civil commotions, and riots.
Although mostly ignored, there are real benefits in owning a life cover the most important one is the peace of mind that comes with the policy. Suppose you suffer a chronic disease like saying â God forbid â cancer whose medication bites off a good chunk of your savings and leaves you on your deathbed, having a life cover policy would ensure you have peace. This is because you will know that you are not moving your family into a stressful life riddled with dialysis debts and no money for their upkeep.
Life insurance will also maintain a regular order of things. The lifestyle of your family does not have to be compromised because the familyâs breadwinner is deceased.
The type of policy you choose to take depends on a couple of things. On top of the list is the number of people you are providing for. If you have only one daughter who has a job, then the type of policy you can take should be a small one that would cover for the funeral expenses. This is because you do not have that many people depending on your income. However, if you have a home-spouse, three kids, and your parents all depending on you the policy you will be taking has to be a larger one. A whole life policy would be more beneficial in this case.
Life insurance quotes are the prices of the policies as per a specific company. These are also significant determinants of the type of systems you can buy. Your future financial commitments and your current income should be put into consideration when you are purchasing a policy. It should be remembered that in this case, a whole life policy would be the most appropriate.