Life Insurance, also known as Life Assurance is a contract between an insurance policy holder and an insurer or assurer where the insurer promises to pay a designated beneficiary some benefit (money) in exchange for a premium upon the death of the insured.
The insurer and the policy holder have a contract in which the insurer guarantees payment to the nominee of the insured person in case of the insured persons death. The death benefit is a consideration of the payment of premium by the insured.
You have a loving family. You may have parents, a spouse and even children. All of them are dependent on you to some extent, if not completely. All is well until one fine day; something unexpected happens to the breadwinner of the family who goes on his final journey forever. Now, in his absence, if he had bought Life Insurance before, the company would have taken care of the family needs for a specific amount of time.
The purpose of Life Insurance is to take care of the immediate financial needs of the deceased (insured) person’s family. Financial support would be provided at the time when the family is financially and emotionally stressed. At least the financial aspects can be taken care of.
It is very important to reveal your medical history to the Insurance Company. If any information is concealed, the nominee will be denied the Insurance cover when the insured is no longer around.
The cover ought to be adequate and sufficient to cover the needs of the entire family apart from inflation and other liabilities.
It’s better to 4reveal your lifestyle habits and diseases. Concealing your smoking habit or any other habit/disease/addiction will lead to rejection of Life Insurance claim.
You have to check for larger sum assured with lower premium rates. That will prove helpful for you and your nominee(s).
How long is the tenure? This is imperative to find out. The longer the tenure is the better.