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Life Insurance.

Life insurance policy basics

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All About Life insurance Policy

Any agreement which is enforceable by law is known as contract. Life insurance also belongs to category of contracts between insurance company and insured wherein insurer agrees to pay a certain sum of money to any person designated by insured as beneficiary, but here payment of money is contingent upon happening of an event, i.e. upon insured person’s death. Insurance companies undertake risks of individuals in exchange of periodical payments made by insured called premium, which forms an important part of this contract.

How Life Insurance Policy Works

Life insurance policies provide protection against an unfortunate event to those who are financially dependent on policy holder. Insurance contract is entered into between insurer and insured, wherein policy holder specifically designates a person as beneficiary, who is not a party to this contract, but money proceeds are given to him upon happening of contingency.




Numerous clauses are provided in policy which forms basis of agreement. Premium is paid monthly or lump sum amount is paid annually, its amount being dependent on factors including age, medical records, time-period, policy type, etc. Specific exceptions are also mentioned like suicide, fraud cases, civil war, etc. under which insurance company undertakes no liability to pay.

Basically three types of life insurance are there:

Term Insurance Policy

In this type, payment is made if death happens with a specified time period. It involves low premium and is renewable.

Whole Life Insurance Policy

In this, policy cover is provided for lifetime as long as premiums are made and is also sort of investment wherein insurer can withdraw his amount.

Universal

In this, lifetime coverage is provided, but with flexible premium and death benefits.

For getting an effective insurance cover, a few things need to be considered:

  • Check reliability and credibility of insurance company.
  • Compare various policies and carefully choose one as per your need.
  • Carefully go though all points of insurance policy.

Advantages Of Life Insurance Policy

Have you ever thought about advantages offered by life assurance? This policy basically provides protection and is a good saving option. Death needs no invitation and by taking insurance policy you are actually fulfilling your responsibility towards those dependent on you. No amount of money can indemnify loss of love and affection, but still death benefit provides significant financial assistance and secures future your dear ones. As an investment option, insurance returns provided after policy matures give you sufficient funds in your retirement age. Life insurance policies are flexible, and numerous tax benefits are applicable to it.

Disadvantages/Pitfalls Of Life Insurance Policy

It is important to analyze some pitfalls of life assurance policies:

  • Premium amount payment generally involves insured to forgo some present expenses.
  • Carefully go though all points of insurance policy.
  • No amount is refunded in case death does not happen in specified time period under term insurance.

All in all, life insurance has more benefits to offer than disadvantages, so it’s a wise decision to take life assurance policy.







Responses (10)

  1. Gangadhar Banakar
    October 23, 2016 at 1:10 pm · Reply

    How to get duplicate copy lic bond

  2. ANITHA
    May 23, 2015 at 8:20 am · Reply

    please give me a help.i am 41 my husbend age 43. we want take join policy or single policy. we are working out side India.

    Thanks
    Anitha

    • Pradeep Daram
      May 25, 2015 at 10:55 am · Reply

      May i know the main purpose of why you are planning for policy? So that, I can suggest you the best policy based on your requirement.

  3. BADRE ALAM LASKAR
    April 2, 2015 at 5:03 pm · Reply

    POLICY NO.49XXXXXXX4

    • Pradeep Daram
      April 4, 2015 at 3:39 pm · Reply

      What do you want? Please don’t share your policy number in online forums 🙁

  4. pradnya pawar
    February 5, 2015 at 6:41 am · Reply

    i wnt loan against lic policy

    • Pradeep Daram
      February 5, 2015 at 12:52 pm · Reply

      Please go through the article…you will all the details..

  5. jitendra singh
    September 26, 2014 at 9:40 am · Reply

    i want lone agenst lic

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