I Am Healthy – Why Should I Opt For a Life Insurance Policy?

These days many people are talking about life insurance policies and its benefits. In fact almost everyone is opting for life insurance policy as it provides them. So if you don’t own a life insurance policy then you must opt for one soon. It acts like a cushion you can fall back on in hard times and provides protects you and your family in different type of crisis.

Now the biggest question that comes in one’s mind is that what exactly is a life insurance and why do you need it. In the simplest term, life insurance policy can be explained as a formal contract between the insurer and the insured. Under the life insurance contract, the insurance company assures you that in the event of your death, they would give an assured amount of money to your family. This financial assistance can be of great help to them during the crisis.

Thus when you opt for a life insurance policy, it’s like getting your life assured. At the event of your death, financial crisis can actually break your family and make them face hard time. The insurance money from the policy can save them from this. The insurance amount you receive is calculated on the basis of the life insurance policy you buy and the premium you pay. Premium is a fixed amount of money which you need to pay at regular terminal.

Many people assume that they are healthy and young and therefore they won’t die early. Due to this they avoid opting for a life insurance without realizing the risk they are taking. John was just 25 years old and was the sole bread winner of his family. He chose not to opt for a life insurance policy. But death is an uninvited guest, he died of a heat stroke one afternoon and with no saving and life insurance policy to fall back on, his family had to face a tough time in making ends meet. Had he opted for a life insurance policy, it would have helped his family financially and saved them from the crisis.

Thus death is an unavoidable and unperceived event and one should not challenge death and should get his life insured. As mentioned before, when you choose to buy a life insurance policy, you basically provide a protective shield to your family. You need to buy a policy according to your requirement and according to the premium you can pay.

When you buy the policy, you are required to nominate someone. The nominee is the person who would receive the insured amount after your death. Most of the policy covers accidental death and natural death. If the policy holder commits suicide then no money is given to his family or to the nominee. Similarly, if there are chances of any fraud then the policy amount may not be paid.

Some of the Life insurance policies work as investments as well. According to this they are categorized into protection policies and investment policies. The latter is treated as an investment where the insured person buys the policy and pays a premium at regular interval. You need to pay the premium for a certain period called as the lock in period. Once that period is over, you can withdraw your amount along with the interest. But if you die during the period then the amount is given to the nominee as insured money. These types of insurance policies therefore help you to grow your capital as well.

In case of a minor, the parents get also opt for a life insurance policy. In this case the insured and the policy owner differ. The parents buy the policy for the children and pay premium for them which make them the insured party. The younger the insured party, the more beneficial it is. The amount of the insurance policy depends on this also.

If you are young then you can opt for a term policy where in you would be required to pay the premium for a fixed period of time depending on the policy you choose. The premium amount for these policies is higher as the returns are also better. Thus you would be required to pay the premium for about 5 years or more depending on policy you choose.

Whatever type of life insurance policy you choose, it is important that you pay your premium on time or else the policy would lapse and you or the nominee would not get anything at all.

Before choosing a life insurance policy for yourself or your family it is important to decide what you want from your policy. Whether you want the policy as an investment or wish to provide the benefit to your family. Then you also need to decide whether you want to opt for a term policy or a permanent policy wherein you would have to pay the premium for a long time.

Other things to be considered while buying a life insurance policy includes factors like face value, interest rate, premium amount, maturity period etc. Life Insurance is must for everyone and therefore you should opt for one and safeguard your family’s future. You can also buy policies for your children that can work as an investment and allows you to provide a healthy future to them.