Out of the different kinds of insurance availed in the market, life insurance is undoubtedly the most popular among all. Although, none would like to take its full advantage in the mid way 🙂 – yet almost everyone wants to get his life insurance done at a certain time of life or the other.
What is life insurance?
As is evident from the term, life insurance is meant to provide a cover for your life. This cover comes in the form of financial security which can be availed by both the insurer as well as the beneficiary. The beneficiary in this case is someone who is closely related to the insurer.
How does it work?
A person, who wants to get life insurance, has to apply for it. The process involves standard formalities and an assessment of the value of the person’s life. This is mostly determined by his earnings. The insurer can take a life insurance policy of any reasonable amount and he has to pay an annual installment for it accordingly. For example, if the policy is of one million USD and for a time frame of 10 years, then he has to place around twenty-five to thirty thousand USD as an annual installment for ten years. During this time, if the person expires, then the complete amount of one million is given to the beneficiary. If the time frame of the policy is over, then the person gets the money back along with the interest. Apart from it, interest in the policy can be availed after every year.
What are the advantages of having a life insurance policy?
Getting your life insured has got obvious advantages. First of all, your close relatives (spouse or children) get an assurance that if some unfortunate incident happens to you, they will have financial assistance as a backup. Second, a life insurance policy is just another way of investing your money and it gives you a certain interest on it on an annual basis. Basically, with a life insurance policy you get that peace of mind coming from the awareness that even if you are not alive anymore, your closest and dear ones will be supported.
Therefore, it is advised that everyone should get a life insurance policy. With a life insurance policy under your belt, you can live your life without any tension in the future.
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