Why should I buy life insurance, some of you may ask? The fact is not every one needs to have this kind of protection. But if you are a breadwinner, then it is better you should start to find out the importance of life insurance.
Life insurance is one kind of financial security you can prepare for your spouse, children and dependent parents, in case of your sudden death.
You can say you buy a life insurance to protect those who depend on you financially.
This sum of money can also provide a timely emergency fund for medical, legal, and funeral expenses, if your family savings is not enough to cover them.
Basically, there are two basic types of life insurance:
i) whole life/permanent life insurance
ii) term life/term assurance
Permanent life insurance
This kind of policy provides lifetime coverage.
The premiums (payment) is more expensive than term insurance. But the amount is fixed over the years.
It is because you are paying not only for insurance, but some of the money is put into the savings portion.
In other words, a permanent life policy offer death benefits and a "savings account" aka "cash value".
If you manage to live, you will get
money back, which is often much more than the amount you spent on your premiums.
Term life
The word "term" here simply means a fixed duration or a specific period.
You can can buy term insurance for a stated period of one year or even up to 30 years.
It only provides coverage for the specified period of time at a fixed rate.
Once the period expires, the coverage at the previous rate of premium is no more valid.
As for this policy, if you suddenly die within the covered period, you (or rather your beneficiary/beneficiaries) will get a predetermined sum of money.
But if you live past the specified duration of the policy, they will get no money from it.
In short, term insurance is basically a death benefit.
This kind of temporary insurance, the premium (payment) is cheaper compared to whole life insurance.
Here is an eay-to-understand guide on how to get the best life quotes and life quotes comparison.
