What is life coverage and why do you need it? This is an important question that can help us all understand life insurance and make the most of it.
Life insurance is a coverage one gets to cover the person in the event of a misfortune and up to death.
The parties involved in this transaction are:
The insured: The person who buys the policy.
The Insurer: The company issuing the policy and covering the claim
The Beneficiary: The insured has to provide someone who would receive the benefits in the event of his/her death. This is the beneficiary.
There are a few other terms involved in this coverage:
Premium: The amount paid by the insured according to the agreed upon cycle. Could be monthly, quarterly or annually.
Sum assured: The total sum payable to the beneficiary on the death of the insured or in some types of life insurance, the amount paid to the insured at the expiration of the term of the policy.
As shown above, there are different types of life insurance with the most common and broad based being whole life and term life policies.
Whole life policy: This is a full policy covering the insured until his/her death. This is usually the most expensive type of coverage.
Term Life: For this type, the policy is set to last for an agreed term. 5years, 10years etc. This policy is usually cheaper than whole life.
Depending on your financial state, you can choose which is possible for you at the time. I always advice that you consult your financial adviser.
You can begin to get more information about life coverage by getting free life insurance quotes from quotes comparison sites now.
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