What is Life Insurance?

What is Life Insurance?
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay out lump sum to your dependants should you pass away during the term of the contract. The cost of policy is determined by a number of factors including your age, health, and lifestyle.

Why do you need life insurance?

Life insurance can help your partner or children continue to pay for any financual commitments you have that might then fall to them to pay if you passed away.

Life insurance can help to make sure your dependants would then be able to keep up with any mortgage repayments and bills you pay if you passed away. The lump sum payout they would receive could also help to pay for other things you would usually help to cover, like food bills or schooling.
Type of Life insurance
- Permanent life insurnace
  • Permanent life insurance provide the benefits of life insurance like paying your beneficiaries in the event of your death and trying to be an investment account at the same time.
  • A permanent life insurance policy includes something called “cash value” as a saving account you’re depositing money into every month. It’s a pool of money you own and can access or borrow againts. The longer you have policy, the more cash value the policy has.

- Whole life insurance
  • When you purchase a whole life policy, you lock in the premium amount for as long as you want the policy.  
  • The loger you own the policy, the more cash value it has. It really is like a savings account. 

- Universal life insurance
  • Like a whole life policy, universal life insurance has a death benefit and cash value. But unlike whole life policies, universal life insurance policies offer adjustable premiums where you able to access some of the cash value to adjust your yearly payment. 
  • Other type of life insurance policies

- Joint life insurance
  • Joint life insurance is a cash value policy covers two individuals for one fee. 

- Survivorship life insurance
  • Survivor life insurance is type of cash value policy, pays absolutely zero benefit to anyone until both spuse die. Then, it pay your kids.

- No medical exam insurance
  • Both term and whole life policies typically require applicants to undergo a medical screening. But no medical exam policies allow yo to, you guessed it, skip the medical exam. You just have to pay more.

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