Life Coverage Explained

What is life insurance? This is an insurance policy taken out by an individual to provide compensation in the event of a disaster or even death occurring to the individual. The policy is issued by an insurer and the recipient of this policy is the insured.

The terms involved in this type of policy is that the insured would pay a certain amount periodically (monthly, quarterly, annually etc). This payment known as premium is made to the insurer as a contribution towards an agreed upon amount called the sum assured.

Upon taking out a policy, the insured names a beneficiary. The beneficiary upon the death of the insured, receives the sum assured.

There are two main kind of life policies. The whole life and term life coverage.

The whole life insurance as the name implies is whole and last through the life time of the insured while term life lasts for an agreed term.

In term life, if the individual dies or is incapacitated before the expiration of the term, the individual receives the sum assured.

If the term runs successfully through and the insured is still alive, he/she would receive the sum assured.

Many people do not like to think about life insurance as it reminds them of something most people would rather not think about. This caused insurance companies to come up with ways to make life policies more of an investment tool.

Anyone who has dependents he/she cares about should get a life policy.

Talk to your financial adviser or an insurance agent for ways to use this tool for your benefit.

Life insurance can be very expensive so get free life insurance quotes now and find ways to save.