Life insurance is a contract held between the policyholder and the insurer or assurer. The insurer promises the insurance policyholder to pay the benefited sum of money in exchange for their premium after a term or can be sometimes upon the sudden death of the policyholder.
The policyholder can buy the insurance accordingly by premium pays. This is by either regularly pay, or at a time by lump sum payment. According to the contract, beneficial payment can be triggered by events such as terminal illness, or critical illness. The expenses can include funeral expenses in the benefits.
What is Life Insurance?
Life insurance is not a pleasant topic to talk about. But when it comes to family this plan can make you feel relieved that you signed up for this policy. It is a policy taken by the policyholder in an insurance company, in an exchange for regular premiums that you pay on time. The insurance company pays out after your sudden death to the people you assigned as your nominees. Whereas, the nominees can usually be one’s spouses, children, or other family members you care for.
It can be an important safety method for your loved ones to be financially independent after you. The policy can help you pay debts, such as mortgage payments, can replace your income, and also provide college tuition funds for your kids.
History of Insurance:
The early for Life insurance was dated to Ancient Rome, forms “burial clubs” which provides the cost of members for their funeral expenses and assisted survivors financially. The company that offered the first life insurance in modern times was the “Amicable society” for a Perpetual Assurance office. William Talbot and Sir Allen founded the Amicable Society in London in 1709. The contribution of each member in this was divided and made an annual payment per share. The age consideration of the members was twelve–fifty-five years. At last at the end of the year the “Amicable Contribution” was divided into portions among the wives and children of deceased members. The Amicable Society was started among 2000 members’ contributions for making it a Life Insurance.
Overview:
The person who does the payments for the policy, is the policy owner, while the person whose death triggers the payment benefits, is the insured one. It is not mandatory that the owner and the insured person should be the same person.
For example – If the husband buys a policy for his own life, then he is both the owner and the insured one, but if the wife buys a policy on her husband’s life then, she is the owner of the policy and husband will be the insured one.
Specific factors that might be considered in Life Insurance:
- Personal medical history of the owner/insured one.
- Family medical history of the owner/insured one.
- Driving record of the owner.
- Height and weight matrix of the owner as BMI (body mass index).
Your policy will be canceled if there are any issues with the personal medical checkup. After that, there will be no chance of buying life insurance again.
In the United States the MIB (Medical Information Bureau) supports the life insurance companies to sell their policies.
In India, life insurance companies will apply for certain medical checkups done in an appropriate hospital, moreover, if there are any issues in the medical results, one may not be approved for life insurance.
How much Life Insurance do I need?
Life Insurance is not a thing that we purchase so often, so it might be a difficult task for one to buy a good and affordable policy which will give a good return to you.
According to your monthly income, you can buy life insurance. Although it is good to have a company life insurance which will be beneficial according to your job facilities.
Firstly, you have to check the needs of your family, according to which you can buy the insurance policy. Because, after your absence your family must get the required amount for their needs.
Secondly, you have to calculate the amount your family requires for their living. Which may include children’s education, spouse independent needs, parent pension needs, mortgage payments, house loans, and many more requirements.
According to the calculations, compare the policies of different insurance companies so that you may buy your desired policy on bases of your investment, and beneficial coverage.
