What is life insurance?

Life insurance is designed to help support your family financially in the event of your death. It does this by paying out a lump sum of money to your family if you die.

The money paid out from life insurance can be used for anything. Most commonly life insurance is used to pay off a mortgage, pay for a funeral or help maintain your loved one's living costs.

Life insurance can give you the peace of mind knowing that whatever happens, your family's finances are secured.

Life insurance can also be known as life assurance or life cover. The contract between you and the insurer is referred to as the policy.
How does it work life insurance?

You choose how much money you would like to leave your family if you die. You also choose the number of years for which the cover will last. You could choose a policy that will pay out no matter when you die.

The amount of money to be paid out is referred to as the 'sum assured' and the length of time referred to as the 'term' of the policy.

Life insurance will only pay out if you die within the term of the policy. Once the term expires, your cover will stop. To reduce their risk, insurers set limits on how long you can have life insurance for. They also balance the risk of longer terms by charging more in premiums.
What is life insurance? What is life insurance? Reviewed by Admin on June 22, 2019 Rating: 5

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