Generally speaking, it has been said that insurance has to do with the payment of premiums to an insurance company in exchange for an insurance policy which entitles the holder to the receipt of some amount of money in the event of a financial loss arising from a specified happening or event.
So many people have no problem with this. They however have a problem with a life insurance policy. To some it is not necessary, while to others the term is really self confusing. What then do we mean by a life insurance? I will try to shed light on it in this article.
Life insurance is a kind of cover which insures the holder in the event of death. It is a profitable buy which serves the purpose of protecting one’s family when the holder of such policy dies. This implies that the family of the holder of this type of cover will not be financially burdened because they will be paid some money by the insurer when he or she dies. The money will surely go a long way in financing the burial costs of the deceased, as well as even helping to keep his children in school, and so on. In a nutshell, it one way or the other lessen the financial stress that the loss of the deceased could cause.
It should be noted that a very important party to a life insurance contract is the “recipient.” By recipient, we mean the person that receives the entitlements of the life insurance policy holder when he or she dies. It is the exclusive right of the policy holder to decide who the recipient will be.
Before entering an agreement with the insured, the insurer would have assessed the way of life of the insured (especially his health). They will seek to know more about him and his family background so as to have an idea of the risks involved in the agreement. In fact, most companies don’t insure people with serious health problems. The costs also differ according to the attached risks.
Just like any other agreement, there are terms and conditions that govern a life insurance policy. In the event of suicide and misrepresentation for example, the policy is declared nullified. Even in the event of death, a certificate of death must be tendered to the insurer. The insurer in return goes ahead to verify it’s genuineness, and the cause of the death.
Moreover, life insurance actually take some time before it matures. Upon maturity, it is the face value of the policy that is given. It matures when the insured gets to a particular age, or upon his demise. Also, just as with any other policy, failed payments leads to outright termination of the contract.
Conclusively, anyone who doesn’t want his or her family to suffer after their demise, especially if you are the breadwinner of the family, please go for a life insurance. It will do your family loads of good when you are no more with them in the physical. In all, everyone needs it and everyone should obtain it.