We always love our family first and keep thinking about their well-being all the time. But just your thinking can not ensure them with a bright and prosperous future minus of any financial crisis. You have to act on this. Before you go for any family life insurance policy, brush up your knowledge on many open and hidden facts of life insurance.
Life insurance is basically a contract between two parties that is you and the insurance company. In exchange of your payments, flatly called premiums, the insurance company gives benefits to your beneficiary or nominee after your death. The death benefit is exact the same amount called sum assured which you have opted at the time of taking the policy.
Why Life Insurance?
All life insurance comes with a single mission to give policy-holder total peace-of-mind. It promises to take a good care of your family’s financial requirements when you are no longer there for them. We work hard and save harder just to secure our family’s future and when you are given the chance to do that by taking an insurance policy, it will be foolish not to grab the opportunity. Apart from the financial side, with life insurance you are actually building a lump sum fund for your near and dear ones. Even if you or your family never face any financial crisis, you are entitled to get the sum assured at end of the policy coverage.
Types of Insurance Policy:
To match diversified financial requirement of each person, every company presents variety of life insurance. There are mainly two types of insurance – Term Insurance and Cash Value Insurance. Term insurance rates are quite low than that of Cash Value insurance. In case of term insurance, you can avail greater cover and sum assurance while investing nominal. But this will happen if you die during the coverage period. Once the coverage period is over, you will not get any money from the insurer.
On the other hand, Cash Value insurance may pinch you at pocket but it gives you a handsome amount of money after coverage period is over. You can also take loans against Cash Value insurance policy. Term insurance is suitable to cover any financial risk that may arise within a fixed time frame like 10, 15 or 20 years whereas Cash Value insurance is apt for life long coverage.
Things You Should Check Before You Take Life Insurance Policy:
Life insurance is not meant just for you but for your family too. General purpose of taking life insurance policy is to create wealth for future or facing any financial crisis strongly. So before you take the leap, consider your as well as your family’s financial requirements. If you are young, earing well and having a good health, then it is better to choose insurance policies that help you to save tax to build a strong portfolio. If you are in and around your 50s, you need coverage for short time span.
A permanent life plan may suit your need. Medical history of your family plays a vital role in selection of amount you want to assure. If you afraid that lifestyle of your family may invite any serious medical crisis, then it is better to discuss this with your insurance company and select plans accordingly.
While taking a policy, be it a term insurance or permanent life insurance, you should know thoroughly the parts which are not covered by your policy. Some policy comes with dividends, some does not. Most important part is, you should decide on the premium amount after scrutinizing your financial condition.
Now check all the discussed points and head for opting the most suitable life insurance policy for your whole family.