The term Life Insurance means a security assurance by a third-party company if something happens to you. In other words- its a contract between a policy buyer or and an Insurance company or assurer, where the policy buyer gets a designated beneficiary amount of money or the benefits in exchange for a significant amount of premium, after the death of a policyholder or insured person. If the death occurs to a policyholder, then the money will transfer to the nominee person selected by the policy buyer. There are different types of Life Insurance policy there. The Life Insurance just not only prevents the risk for your family, but it can give you some benefits it the time of taxation, but that is subject to federal and different states and tax law. We saw the Life Insurance type procedure first time in Ancient Rome. The “burial clubs” then provides the funeral expenses and financially assisted the family survivors. In modern times there are some general Insurance companies, who can provide the same service for their clients, but it seems, the customers just want to remain alive as long as they can.
The Life-based insurance contracts can be divided two broad categories:
1. Protection policies – Protection policies may only provide a benefit, which is typically a huge payment when the term ends. But if something bad may occur, the protection policy provides the financial sum as the policy’s sum assured. This type of policies is design as term based insurance or time-based insurance.
2. Investment policies – the primary objective for Investment policies is to provide the growth of original money by regular or a one-time premium. It is a contract portfolio manager and a policy buyer, following some general rules for policy. The Investment policies can classify as- For variable life type, whole life type and universal life type policies.
In some types of Life Insurance, not just the policy buyer, but his/her entire family will cover the accidental or normal death benefits. In a type of Life Insurance named – Group life insurance which usually a company buys for the employees. This will minimize the financial liabilities for the company to the employees. If a member wants to quit the Group life insurance, while maintain the coverage by buying solo individual coverage, he/she will be allowed to do so. Bet before selling you the Life Insurance, the service provider may and always checks about your health condition, age, financial conditions, family background, your social security number, bank details, etc. it depends on the policy types though. The amount of your premium is based on the several factors like age, medical conditions, etc.
But there are some factors involves too. You can’t claim the Life Insurance money if the person commits suicide, or dead by accident as a drunk driver, or any other thing that voids the terms of the insurance. You should need a death certificate issued by the qualified doctor. If the death is suspicious or if the policy amount is significantly big, the Insurance Company may and should investigate before clearing the claim. If any obligation found in circumstances surroundings, the company won’t pay you a penny. If you are a policyholder, be truthful, while you are dead too.