First let us understand what an insurance means. It is an agreement between an insurance policy holder and an insurance company in which the insurer agrees to pay a quantity of money in lieu of a premium upon the demise of an insured person or after a specific amount of time is known as life insurance.
Remember that factors like age, health, and the type and amount of insurance acquired affect how much it costs and if it is available. It would be wise to confirm your insurance coverage prior to adopting any insurance-related strategies.
But why is life insurance important? Many people believe life insurance is a waste of money and forgo purchasing it because saving for retirement or saving for the future is more important. Over 58% of Sri Lankans don’t have enough money set aside for their retirement, and it was measured according to the Sri Lanka Gross Savings Rate, only 26.7% of the Sri Lankans have savings in March 2022. According to the National Association of Insurance Commissioners (NAIC), current global life expectancy rates are 2-3% higher than they would be without additional benefits.
The importance of life insurance cannot be understated. If you are the breadwinner of your family, your death could lead to financial ruin for your loved ones. No one knows when their time will come, which is why it is so important to have life insurance. Not only does it protect your loved ones in the event of your death, but it can also provide financial security in the event of an unexpected illness or unemployment. Life insurance is one of the most important things you can buy for your family’s future. It’s a way to make sure your loved ones are taken care of financially if something happens to you. Life insurance can also give you peace of mind, knowing that you’ve done everything you can to provide for your family.
While many people believe that life insurance is only necessary for those with dependents, this is not the case. Everyone, regardless of their relationship status or number of dependents, should have some form of life insurance. This is because life insurance provides financial security in the event of an unexpected death or illness. For example, if you are single with no dependents, your life insurance policy can be used to pay off any debts you may have, such as your mortgage or student loans.
But for most of us, the real questions about life insurance aren’t about how much you need or what kind of plan is best. Those are important questions, but they’re not the ones that keep me up at night. What is the best type of insurance? What type of insurance will help my family upon my death or illness? Or what will happen to my family if I die in debt? Death is a sudden, and it is a very tender topic which most of us do not think about in our busy daily lives.
For that reason, below mentioned are two of the basic types of life insurance-Term life insurance and Permanent life insurance- which would help us understand more about life insurance. Permanent life insurance is a major category consisting of three main types: universal, variable, and whole.
The most fundamental and frequently least expensive type of life insurance is Term. Policies can be bought for a predetermined amount of time. The insurance provider will compensate your dependents the total amount of your coverage if you pass away within the time frame
specified in your policy. If you simply have a limited budget or require life insurance for a brief period of time, term insurance can be helpful, such as when your child acquires a job or until they graduate from college.
A “monetary benefit” savings component is frequently included with permanent life insurance policies. Permanent life insurance provides financial security in the event of an unexpected death or illness. Under Permanent life insurance, let us discuss about;
Universal life insurance, which pays out a fixed sum of money to the beneficiary regardless of how many times the policy is renewed. A policy with a universal life insurance rider can be a great way to protect your family in the event of your death.
Variable life insurance policies allow you to customize the amount of coverage you need and the premiums you pay. Because these policies have a variety of coverages, they are perfect for people who are unsure about what they need or who want to be able to increase their coverage as their needs change. A variable life insurance policy can have a rider that pays out a specific amount each time it is triggered, such as a death benefit. Or, the rider might provide income for a set period of time, such as five years or until the policyholder reaches a specific age.
A variable life insurance policy provides different amounts of coverage depending on the age of the policyholder and the severity of the illness. For example, a 20-year-old with a mild illness may only be required to pay a small deductible, while a 70-year-old with a serious illness may be required to pay a large deductible. This type of policy is a great way to protect yourself and your loved ones in the event of an illness.
Whole life insurance remains in force for the policyholder’s entire life. The policyholder pays premiums for the whole life insurance policy, and the death benefit is paid to the beneficiaries upon the policyholder’s death. Whole life insurance policies also have a cash value component, which grows over time and can be used to pay premiums or borrowed against in the event of an emergency. Whole life insurance is a good choice for people who want to have a life insurance policy that will remain in force for their entire life.
There are a few things you should keep in mind when purchasing life insurance. The first is to make sure you are fully aware of all the coverage options that are available to you. You should also consider how much coverage you need and what type of policy would be the best for you. Finally, be sure to compare rates and choose the policy that is the best for your needs.
Therefore, in conclusion, there are moments in life when you’re given a choice, and you must act fast, or else you’ll lose the chance. And sometimes, you’re given a choice and you don’t know what to do. You’re paralyzed by indecision, and all you can do is stand there, paralyzed. And then sometimes, the choice is made for you. This is where life insurance comes into play. You get the choice and you must act fast, because the more you grow older the more it gets expensive. And sometimes, the choice of life insurance is given you don’t know what to do, and then sometimes, when death comes, the choice is made for you. If you have no life insurance, your family suffers.