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Questions to ask yourself before buying a life insurance policy

A life insurance policy is an investment for decades, so it makes sense to ask yourself a few questions when choosing insurers.
Questions to ask yourself before buying a life insurance policy

What does the policy give me?

The policy can bring high returns, payments after the loss of a loved one, pension payments. There are four types of life insurance: temporary, whole life, risk and multiple insurance.

Temporary insurance is concluded for a certain period of time. Insurance event is the death of the insured person for any reason. Premiums are paid periodically.

Whole life insurance lasts throughout the life of the insured person and is indefinite. Whole life insurance provides financial support for the family of the insured person helping to avoid high tax rates and increase existing assets in the event of death. Premiums are paid as a lump sum or periodically. This insurance type is used as legacy transfer or financial support for relatives after the death of the insured person.

Risk insurance is similar to whole life insurance. In case of insured event, a certain cash payment is made. Risk insurance protects the insured person from various kinds of risks: in case of loss of labor capacity (disability of a certain group), diagnosis of a serious illness, hospitalization, surgery, or injuries. This type of insurance helps to get a lump sum of money. The amount of premiums is from 2 to 5% of the insurance coverage, but may vary depending on gender, health status, age of the insured person.

Multiple coverage is a type of insurance in which insurance against several risks such as death, survival, accident, illness, disability, and so on is combined in one contract. It is concluded for a long period (from five years) in order to accumulate a certain amount of money. Premiums are periodic or one-time.

Who is the beneficiary?

Beneficiary is an individual or legal entity in whose favor the policyholder concludes a life insurance contract.

If the beneficiary is not specifically named in the life insurance contract, the contract is considered concluded in favor of the insured. In the event of death of the person insured under the contract, in which no other beneficiary is named, the heirs of the insured person have the right to receive insurance payment.

Source: https://finance.yahoo.com/news/looking-life-insurance-3-questions-165613737.html

Photos are from open sources.

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