One of the main reasons to get a life insurance policy is to protect your loved ones from financial problems if you pass early. The main rationale for buying a policy is the risk associated with work and business, outdoor activities, and travel.
Risk life insurance can be individual (personal, for family members - one or more), and group (corporate).
Investment life insurance is the second reason to buy a LIC policy. Such insurance policy is concluded for a period of five to 15 years. The insurer divides the premium into two parts. The first part is invested in risk-free financial instruments (for example, government bonds) in order to save the money invested by the client and get a small income from conservative investment participation. The second part is invested in high-yielding assets. The client chooses them independently (gold, oil, shares of large companies) when signing the contract and can change them during the validity of the policy.
If the assets rise in price, the policyholder receives a high investment return several times higher than the interest on a bank deposit. If the assets depreciate, the policyholder will keep 100% of their capital, but even then the return will not be negative. Thus, the insurer does not impose risks on the client and saves their invested funds.
In addition to savings and capital increases, insurance covers risks to the life of insured persons. But insurance coverage under such programs is minimal, which makes it possible for insurance company to earn more. The amount of insurance benefits in case of death, disability of the insured is indicated in the contract.
Source: https://www.cbsnews.com/news/some-of-the-best-reasons-to-buy-life-insurance/
Photos are from open sources.
