When you buy life insurance, you make a contract with an insurance company that promises to provide a certain amount of money to your beneficiaries upon your death. In return, you regularly pay premiums monthly, quarterly or yearly. The premium price is based on factors such as your gender, age, medical history and the policy of life insurance you purchased.

The life insurance policy is an essential component of financial planning. As a life insurance policy can secure the family against financial stress in case of an unfortunate event such as when one passes away.

The life insurance company pays money directly to the beneficiaries in the event of your death. They will use the money:

• Cope up with your lost income
• Financing a child’s education
• Home loan payment
• Pay for your cremation and other related responsibilities

There are many types of life insurance that can help you and your family while you are still alive. For example, permanent life insurance provides a portion of the cash value that can be used well during your life.

There are two main life-insurance types.

Term life insurance protects your loved ones for a fixed period, usually between one and 20 years. The reality is that when you stop paying premiums, the protection will end. When you die during the insurance period, the insurance company pays the benefit. However, they do not generate cash value.

Permanent life insurance policies do not expire after a fixed term. They are designed to cover your loved ones indefinitely as long as you pay your premiums. Some forms of such policies generate cash value.

Before investing, you should know how much life insurance you need

The goal should be to establish a life insurance package (through one or more policies) that compensates for the loss of your financial contribution to your family after your death. Here are two methods to find out how many life insurance policies you may necessitate.

Compute the need for a replacement income.

It is a well-established tool to assess your family’s financial commitment until you retire. It is more than changing your income; this includes everything you provide for your family:

• Salary
• Other Benefits / Health Insurance
• Personal services you provide for your children, such as child care, cooking, home maintenance, and more.
• Your annual expenditure on personal needs such as food, clothes, entertainment, and more.

Analysis of survivors’ needs. This strategy focuses on changing the amount of revenue of the surviving spouse and the need to maintain a reasonable income and lifestyle standard. To assess any additional life insurance needs, the requirements of your beneficiaries are compared to their assets, current life insurance, and revenue sources. An insurance agent or financial

the planner can help you assess an accurate figure and choose an adequate cover.

It is never too early to think about life insurance – get the financial assurance you and your family need and deserve.

Life insurance benefits 

• Life insurance provides comprehensive life insurance protection.
• It provides long-term coverage.
• It ensures the life stage-specific plan.
• It allows for a good tax saving option.