Life Insurance is a set amount of money that is reserved to be given to a client’s loved ones in case of death. Getting life insurance is most suitable for the breadwinners of the family. It gives an assurance to the client that his/her family will be safe and secured in case something happens that compromises the family’s income.
The Life Insurance covers:
If the client dies during the set term of the policy, the insurance company is obliged to provide the remaining family with financial needs such as funeral expenses. This is called a lump sum.
Some insurance companies indicate in the same policy an early payout in case of terminal illness. The company may also include protection for the client against critical illnesses like cancer, stroke, or heart attack.
Life insurance is not necessary for those individuals without anyone considered as liabilities or dependents. Some individuals opt to avail of this plan, though, to cover the outstanding mortgage balance of their family or parents’ home. Still, both plans may be covered in one policy depending on the circumstances.
Listed are different types of insurance policies:
Family Income Benefit
In this plan, there is a set amount of cover and a set length of term for the policy to be valid. If the client dies, the family will keep receiving a regular income instead of a lump sum but only for a set period of time.
Mortgage Life Insurance
In terms of mortgages, this plan is suitable for repayment until the debt of the client is reduced to zero. The family will not have to think about leaving their house since it will be paid by the insurance company.
Whole of Life Insurance
This one covers the client’s whole life and is not limited to a set period of term and is, therefore, more expensive than the other forms of insurance.
Joint Life Insurance
This is best for couples and starting families since the amount to be paid will be shared by both individuals. However, this plan only covers one life and is, therefore, paid out only once on the event of the death of one of the couple.
Getting a Life Insurance may not look beneficial during the mid-life, but it is actually more advantageous in the long run, especially during retirement. It’s even better to start availing of an insurance policy earlier. This is best to be discussed with a financial adviser.