Complete Guide to Life Insurance and its benefits!

Has this ever happened to you in the middle of the night when all of a sudden you wake up with a thought that when you will die what will happen to your family? Who will take care of their financial needs? Well, you are not the only one who has such nightmares; thousands of people are scared for the future of their family. The future is unpredictable but life can be insured. Now, when we all are blessed to have a life, then we should insure it with life insurance or at least some kind of personal insurance.

Every question has an answer we just need proper guidance to find it. So let’s start with knowing the solutions for the above thoughts in your mind that how you can insure your tomorrow?

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What do we mean by Personal Insurance?

Personal insurance covers three types of insurance: Short term and long-term disability insurance, Health insurance, and Life insurance.


#1: Short term disability (STD) and long term disability (LTD)insurance

Short term disability insurance pays you a certain portion of your salary for a given term. If you have any illness or injury and are unable to work or are resting. It starts from the 8th day of disability and continues for 180 days.

When any major life events take place (eg. back pain, osteoarthritis, Cancer Accidental Injuries, Cardiovascular/circulatory disorders, mental disorder, etc.) then Long term disability insurance protects you from severe financial hardship. Insurance pays you some percentage of your salary in the case of complete disability. This is mostly 2/3 parts of your base earning.


#2: Health insurance

Life is a priceless thing in this universe. It is saved by God but can be insured by humans. Through any health insurance, you can pay your medical expenses. It can be Private health insurance or National or social health insurance or National social healthcare program, depends on what you have purchased out of these above three.


#3: Life Insurance

As the name says, it insures your life. That is, generally, it gives your near and dear ones a lump sum amount after your death. Let’s discuss this in detail.



What is Life Insurance?

In simple terms, Life insurance is designed as a back-up plan for life. This coverage of life insurance is for yourself and your loved ones which means they will be financially prepared by this policy after your death. Also, there are many companies that are providing life insurance like William Penn, Mutual, Guardian, and Prudential, etc.

This insurance basically provides death benefits to your loved ones so that they will able to pay monthly bills like Electricity, water, house rent, etc. and other everyday expenses so that after your death they can continue living the current standard of living and can repay other debts like mortgage any other type of loan. There are many terms which are used and included in life insurance:

Insured Person- for whom the life insurance plan is purchased

Policy proceeds- the amount that is insured person pays to company and later on after the death of the insured person the same amount shall be given to his beneficiary

Beneficiary- to whom the sum assured and other death benefits will be paid by the life insurance company

Term- insurance policy duration or tenure which provides life insurance coverage. The period can be range can be 10-year and 15 to 30, and 35-year terms.

Other terms are face amount, bonus rate annuity, premium, insurable interest, dividend, lapse rate, life expectancy, mortality, rider, rating, a standard risk, and many others.



What are the Benefits of Life Insurance?


We understand the benefits of something, only when we know it’s worth. A health emergency, sudden death, or accident, are uncertain events that can happen anytime in anyone’s life. But we should always be prepared for consequences of such uncertainty and this is where the importance of life insurance lies.

Let’s understand the benefits of Life insurance in easy and simple words:


#1: Insurance ensures peace of mind

Honestly, firstly, the most important benefit is peace of mind knowing that your loved ones will have financial stability after you are no more.


#2: It offers you a protection cover

Secondly, Protection for you and your family. It’s a high-risk cover. Thus, the protection cover offered is also quite good and it must be so.


#3: Covers other dies and settlements too

Thirdly, Provide benefit in paying final dues i.e. funeral expenses, medical bills (if not covered by health insurance), estate settlement costs, and other dues. Also, any debt (mortgage, credit card, student loan, etc.) won’t die with you but can be paid by life insurance.


#4: It acts immediately!

Fifthly, most insurance policies even provide an advance or immediate benefit, without a waiting period, to help cover immediate costs following death.


#5: Covers even your philanthropic goals!

Even if you have any philanthropic goal after your death then that it is achieved. And the benefits are provided to the charity of your choice.

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A day without Insurance is like a day without Sunshine. This quote is so true because when the breadwinner of any house dies, it is a massive loss to the family. And this loss sets down everything. Here insurance plays as a ray of hope to solve the financial crisis.

There are many financial institutions in every country or state that are running awareness programs to protect you and your family from the financial crisis. You just need to choose the right insurance policy which is beneficial and guaranteed. Do not trust blindly on advertisements. Read carefully all the related documents. Be more curious in asking and finding more and more about terms and policies. Check reviews of customers. And look for a good advisor who can guide you perfectly.

Apart from this, you need to be aware of or protect yourself from the internet scams and fraud emails. As many unfamiliar insurance companies are involved in such crimes. You may find their deals very welcoming and chances are, it is. But before dealing with them check their ratings, check the status of their company in your status insurance department where you can verify the complaints if done before.

All you need to do is understand the importance of life insurance and make the right choice. And find out the needs of your family and manage your budget which fits to pay the insurance premium. If you haven’t done any insurance yet then it’s not late because it’s never too late to start over. So, go and insure yourself.

We have tried to provide you as much information as possible about personal insurance and life insurance. If you still have any doubts, please feel free to ask them in the comments below. We will reply to them as soon as possible.