Endowment life insurance
It can be compared to a bank deposit. It helps accumulate the desired amount by a certain date. For example, a family wants to give a child an amount efficient to study at a good university when they come of age. But the 18th birthday will come only in seven years. The insurance company, based on this period, will calculate the amount that needs to be paid. Typically, all contributions have a fixed percentage. If during the term of the contract an insured event occurs, for example, injury, death, or a complex illness is detected, the company will pay the established amount. If this does not happen, then at the end you will receive the accumulated contributions back with the interest accrued on top.
Risky insurance
This service supports you in case of any risks and accidents. For instance, if there was a road accident or occupational disease. If something happens, the victim or their family members will receive compensation.
Voluntary pension insurance
It is a great option for planning your life after retirement. Over a certain period of time, you make regular contributions, on which interest is accrued and indexation is applied. And after retirement, you receive your savings monthly along with pension payments, and sometimes - even more than what they have accumulated, if a “lifetime” form of payments is established.
Investment insurance
It is similar to endowment due to the accrual of interest, but is usually issued only to generate return. The truth of the matter, for various reasons it may not occur. The insurance company manages your funds, for example, investing them in securities. If the investment is successful, part of the profit will go to you. However, the company may fail, which means you won’t get anything.
What is life insurance for?
It makes it possible to take out a large loan (for example, a mortgage loan) on more favorable terms, as bankers willingly reduce the loan rate for the insured person. In case of insurance event, such as death, the insurance company and not your family members, pays off the rest of the mortgage payments. These are additional costs for certain but often they are very small.
Life insurance is relevant for those who love to travel. You never know what may happen in unusual conditions, for example, poisoning, sunstroke or a fracture.
Life insurance is a great way to save up for a large purchase, such as an apartment, education or car, in small payments that are comfortable for your budget. The main thing is to make sure that you are taking out a policy from a reliable company that will not close in a couple of months.
Insurance can be a good investment. The dividends you receive will form a safety cushion. Unlike standard bank deposits, insurance proceeds cannot be recovered in court or divided in a divorce. This means that this money is guaranteed to stay with you.
Source: https://militaryfamilies.com/military-benefits/child-to-young-adult-a-life-insurance-journeyа/
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