Life Insurance has always been a delicate issue for many people. These issues come in different forms ranging from sentimental to factual. I will try to break down life assurance in this simple life assurance guide.
What is Life Insurance?
Life insurance is an insurance policy. It is designed to provide financial compensation to a next of kin in the event of death or permanent disability by accident or terminal illness to the person on whose life it is taken (life assured).
This compensation could come as a lump sum or collected in installments over an agreed period of time depending on the terms of the policy at inception.
In general, life insurance caters for situations common to a man. Situations like dying too early and living too long.
The secondary benefits of a life insurance policy are as follows
- The benefit of tax rebate
- Additional collateral for a loan
- Budgetary discipline for a company
- Brand loyalty by employees
- Confident lifestyle
- Peace of mind
- Compliance with the provisions of law
- Business continuity
- Planning for retirement
Who should take a life insurance policy?
- Anybody who has a beneficiary who will be adversely affected by your demise or disability
- Any person holding a key operational or financial role in an organization
- if you are looking to get a personal loan facility from a bank or financial institution
- A person who would like to enjoy tax savings within the provisions of the law
- Business owners who would like to stay on budget through the fiscal year
- Any business owner who would like to infuse loyalty in his/her employees through benefits
- Any employer who would like to comply with the provisions of the law and be positioned to win contracts.
What are the challenges of taking up a life insurance cover?
- Ignorance of its availability
- Low understanding of how it works
- Low disposable income
- Religious beliefs and sentiments
- Past negative experiences with insurance agents and companies.
Steps to taking up a life insurance cover
- Know your pocket: what level of disposable income do you have?
- Decide who your beneficiary will be
- Decide upon the duration for your policy
- Choose the scope of cover: what kind of risk are you covering and to what financial level?
- Match your needs to available plans
- Visit an insurance service provider to sign the contract. You can do this through an agent of the company.
There you have it…a simple guide to life assurance.
I would encourage you to go through this post again so you can get to understand better. You can ask me any questions you might have in the comment section or on my Twitter handle: @everythinginsur.
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Watch out for the next post…Take care!