What do you know about life insurance?
There is only one insured event in risk life insurance, it is death. Such a policy assumes that a person makes a lump-sum payment or pays regularly in instalments depending on the agreement. In case of insurance event, the beneficiaries receive the money.
Risk life insurance often becomes the basis for so-called mixed insurance, in which you receive a payout even if you become ill or injured. There are no savings made.
In such mixed insurance, you can independently choose the following:
The amount of payment;
A list of possible adverse events (disability, injuries, life-threatening diseases);
Term: from one year to 20 years or more.
In the case of property planning, a life insurance policy can be especially beneficial for those with few liquid assets. Term life insurance is also suitable for those who do not want to burden their heirs with expenses after death.
What do you expect from the policy?
Another way to evaluate life insurance is through people's desires. One of the options for life insurance is targeted financing, when a person saves money for his own pension or his children’s education. Giving an inheritance is another possible use of a life insurance policy. The insured may transfer his investment policy to children or grandchildren.
How much do you spend on life insurance?
Term insurance is usually pure insurance without the possibility of accumulation. The investment component significantly increases the cost of the policy. Insurance premiums on pension planning are significantly higher than term insurance premiums. But it is possible to save money even here. For instance, young people who enter into a retirement annuity contract save significantly more than those who buy a pension plan at the age of 40-50.
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