Life Insurance

Buying Life Insurance Secure Your Family Life

Most people do not fully realize the significance of getting themselves insured adequately. Getting an insurance cover could be the one decision of your life that could eventually uncomplicate many other decisions that you or your loved ones may have to take. For instance, your life insurance, on the occurrence of an unfortunate event, might secure your family’s future, might endow them with an ability to pay the mortgage, the school fees, the utility bills, grocery bills, etc. The question you have to ask yourself before you head to buy that life insurance is whether there are any people that are financially dependent on you.

Once you have decided to buy life insurance, the next step is to determine the right amount of cover. A general rule of thumb is to gauge, approximately, the level of debt that you are liable to. The amount your family may require to pay off debts and to make sure that your absence won’t overburden them. The understanding of ‘risk’ is important. What is the magnitude of risk your family faces in your absence? The idea is to estimate the sum of money that would help them tide over the risk they face. For the small losses that one has to pay, in the form of premiums, a greater, oppressive loss can be successfully averted.

Life Insurance policies can be broadly categorized into protection policies and investment policies. Protection policies are crafted to provide a pre-determined benefit on the occurrence of the insured event. This typically includes a lump-sum payment and a common form of this life insurance policy is the term insurance policy. Investment policies are the types of life insurance policies which facilitate the regular growth of capital by payment of premiums. The common forms of this type of life insurance policy are whole life, variable life, universal life policies, etc.

Term life insurance policies provide life insurance cover for a specific period of time in exchange for a specified premium. For example, a person can chose to be covered for a fixed period of 25 or 30 years. If the insured person dies before the specified term is up, the beneficiaries, or the family, receives the insurance amount. Among the types of permanent life insurance policies are whole life coverage and universal coverage. The main advantage of whole life insurance is that it guarantees a death benefit for your family.

Thus, there are several life insurance policies designed to meet a wide range of needs and aspirations. If your family depends on you financially, the security of an insurance policy could be the best gift you could give them.