Why You Need To Buy Life Insurance

Meta: Life insurance is an essential tool to help you plan your finances when risks occur in your life. Gain more knowledge of it right now!

Table of Contents:
  • 1. Introduction
  • 2. What Is Life Insurance?
  • 3. Types of Insurance
  • 4. How Much Does It Cost?
  • 5. When Do You Need to Buy Life Insurance?

1. Introduction

You always wish for a peaceful life. However, life sometimes brings unexpected things. Serious illness, accidents or even death can happen to anyone. In these cases, the finance will be a problem if you do not plan ahead. Life insurance will be a companion to those situations!

Life insurance is a very common type of insurance in developed countries. So, what is life insurance? Hơ many subtypes of it? How much does it cost? When should you buy it? Keep reading to learn!

2. What Is Life Insurance?

Life insurance is a certain payment by the insurer to the holder of insurance policy for a sum of money as agreed upon in the contract when any risk occurs or the period ends. The policy owners must pay regular premium within a pre-arranged period of 5, 10, 20 or even 30 years. The exact amount of premium will vary depending on the life insurance quotes.


This is the only product that now combines the elements of financial protection, disciplined savings, safe investments, education funds for children. Life insurance is a form of insurance with a deep social and economic value as well as a great humanitarian one.

Pros

  • • Life insurance offers peace of mind because it helps to reduce concerns about what will happen to your loved ones if you suddenly die.
  • • A life insurance policy is relatively simple.
  • • It creates saving habits in disciplined and smart manner.

Cons

  • • If you live long enough, your family will almost not get the full value as in the contract.
  • • The value of the life insurance fund can fluctuate depending on the market.

3. Types of Insurance

Term Life Insurance

Also known as temporary insurance, term life insurance is insured for death occurring within the time specified by the contract. Accordingly, if the death does not occur within the prescribed time, the holder does not receive any money. If the death occurs within the effective duration of the contract, the insurer is responsible for paying the premium to the designated beneficiary.

Whole Life Insurance

Also known as permanent life insurance, it is a type of life insurance in which the insurance period is not determined, and the amount of insurance paid to the heir when the policyholder dies. This insurance can cover the buyers as soon as they reach the age of 99.

Universal Life Insurance

This is a program from the whole life insurance. At the time you pay your premium, the insurance company will split it into two parts: the cost of insurance and the cash value.  For example, if you pay $50/month, then $20 will go into insurance and the rest $30 will go into your cash value.
The advantage here is that your money is flexible. Thus, you can pay as much as you want without being below the lowest level.

4. How Much Does It Cost?

Knowing the cost is a difficult task because of having a variety of life insurance types as mentioned above. What's more? It is based on many effects like what policy you opt, how much coverage you look for, or your age and health. In general, the younger you are, the less the premium is paid. Higher age means more risk. So, join life insurance as soon as possible so that premiums are kept as low as possible.


In addition, it is a good way to make a life insurance comparison for online rates using website "aggregators”. The rate will be different depending on your geographic region, country, social system, economic situation of each country, etc. In addition, the insurers have to master the basic characteristics of each type of product, analyze the cash flow, and analyze the general development trend of each product on the market.

5. When Do You Need to Buy Life Insurance?

Age

When you are young, you are interested in the interest rate that those pay for customers. At a young age, you are quite "carefree" with risks in life. But when the age is over, when health is showing signs of decline, you pay more attention to health care products.


Children

The fact that having children has a huge influence on the selection of life insurance. Customers with children tend to choose those packages associated with education to create the best development environment for them. Meanwhile, customers without children often do not have this need.

Income

How much monthly income, more or less, is an important factor to consider when it comes to buying life insurance? A person with an unstable income often chooses packages allowing flexible premiums (increasing/decreasing annual premiums). Whereas, a person with a stable income is more likely to be interested in the coverage of the insurance.

Position

An employee usually tends to opt packages with annual premiums that are within their own financial capacity. Businesses often pay more attention to the relationship between their head’s health and the existence of the business. Therefore, they join the life insurance to avoid heavy losses that can occur when the business head accidentally encountered unintended risks in life.

Market

The policy market is constantly changing, updating new products better and more accessible to the customers.

6. Conclusion

Life insurance is just a small accumulation, but what it can do for you and your family is incredible – help our loved ones continue to live their lives in the most difficult times. In addition, this fee helps us express our love and responsibility to our loved ones.

With those important significances, I believe that you can make your own choice without having to ask anybody else for the best advice. Thank you for reading!
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