Insurance is a risk management technique; that helps to reduce the risks of financial burden, in case of any mishappening. Insurance is also known as a risk transfer technique, in which you shift your economical losses to your insurance company by paying a fee called a premium. Insurance protects an individual against financial hardships due to unexpected events like; theft, illness, physical injury, damage to property etc. Actually, life insurance is a legal agreement between you and your insurance company; in which you have to pay premiums and in returns, your insurance company pays you a certain amount of money in the event of loss you insured. The amount of money that your insurer pays you or your nominee (on maturity or event of loss) depends upon the amount of protection you have purchased. Your family may face financial problems upon your death; but if you have purchased a life insurance policy then it might help your family to bear the immense loss. If you have dependents then you must have a life insurance policy.
1.Types of Life Insurance
Term Life Insurance
Permanent Life Insurance
a) Whole Life Insurance
b) Universal Life Insurance
Endowment Life Insurance
2.Understand Your Needs
- Why would I need life insurance? (Answer of this question could help you opt right type of life insurance, see types of insurance discussed above))
- How much cover do I need for life insurance? (Tip: Evaluate your present and past needs of insurance and decide how much cover would be enough?)
- Which life insurance policy would be better for me? (See types of life insurance)
3.What is covered and what is not?
5.Revocable and irrevocable
8.Compare Insurance Plan
Nowadays, competition has been increased among insurance companies. Therefore, you can save your money by comparing same insurance policy between different insurance companies. You can find number of insurance comparison websites on internet; that allow individuals to compare insurance policies between different insurance companies. Comparison is a best strategy to get the same life insurance policy at attractive prices.
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