Many of us do not know what life insurance is or the benefits of life insurance. As a result, we remain ignorant of this and leave the world without making some provisions for future generations. Today’s blog will discuss life insurance policies in detail and explain why you should buy life insurance.
Many of us think, why do life insurance? What is the need to take so much trouble? But think about it, maybe your family is solely dependent on you. You can die anytime due to an accident or any fatal disease. What will happen to them in that case?
So one solution to thousands of such potential problems is life insurance. Life insurance allows you to leave guaranteed savings for your family for any unforeseen event.
What is life insurance?
Before knowing the benefits of life insurance or life insurance, let’s know what it is. Generally, it is a type of savings where you deposit a certain amount every month, and the insurance company pays you that promised amount in case of any accident or loss.
Was it a little difficult to understand? Usually, when we open a savings account in a bank, we deposit some money for a specific time in return for certain monthly dividends. After a certain period, we do not withdraw that money with interest. But not so with insurance.
Suppose you take out a life insurance policy of Rs.5 lakhs where you have to pay a premium of 3 thousand rupees per month. But the insurance company will not give you any benefit for this 3 thousand rupees. Instead, if you die due to an unexpected accident or illness, they will hand over those 5 lakh rupees to your family, which will financially help them.
So in simple words, life insurance is a contract or guarantee arrangement where you agree with the insurance company to pay compensation to your family after your death in case of any future unfortunate accident by depositing a certain monthly amount.
Benefits of Life Insurance
Life insurance has many advantages, as it offers exceptional help in an emergency. As a result, you and your family can be prepared in advance to face any unexpected disaster. Life insurance has several advantages. It is mentioned in the sequence below.
1. Post-death benefits
If any unforeseen event happens to the insured, resulting in loss of income to their family, the insurance company compensates them in the form of a death benefit. Appointed candidates get the promised total amount and bonus accrued over a specified time.
Besides providing death protection, many life insurance plans also offer monthly income benefits. Such insurance is an excellent benefit for individuals who have reached retirement age and whose income is declining.
But while getting life insurance, be careful to evaluate the features and benefits of several plans and select the best one for your needs to provide the best protection.
2. Return on investment
Renowned financial advisors suggest that everyone should invest in a life insurance policy. Not only to provide financial security to the family when you are not there but also to get an excellent return on investment.
Additionally, life insurance is a safer financial instrument when compared to other investment options. The money you have invested in the insurance will be fully paid back to you as guaranteed money at the end of the term or after the death of the insured.
3. Tax benefits
A significant life insurance benefit is the tax benefit. If you are a salaried employee and purchase a life insurance policy, you may be eligible for a discount.
4. Loan facility
You can take a loan against life insurance coverage when you need money in an emergency. Almost all major insurance companies now offer loan facilities against insurance to policyholders.
Depending on the terms of the policy, you can borrow a certain proportion of the policy’s cash value or the sum assured. So before you contract for insurance, know the loan policy with the insurer well.
5. Correct financial planning decisions
Planning your financial decisions carefully as you progress through life stages is essential. Life insurance can help you in just this case. You can use various life insurance benefits to provide financial support to the family in case of your untimely death.
This will not only help them fulfill their financial responsibilities, but it will also facilitate a financially independent lifestyle without disrupting their lifestyle. It will help immensely in various essential occasions like the marriage of sons and daughters, paying for the schooling of Panar children, and building a dream house for post-retirement life.
6. the Guaranteed source of income
Another benefit of life insurance is a guaranteed source of income. Your family feels financially secure in your presence. Because you earn a regular income to meet their needs. Your earnings help pay off debt (if any), house rent, daily bills, children’s education, and other household expenses.
But what if you suddenly leave this world? Some life insurance policies provide regular payouts, which can cover the loss of income due to the death of an earning family member.
7. Business Security
Several life insurance companies currently offer a facility with their insurance policies. If you bought the policy and ran the business, your business partner can buy a share of the policyholder after death.
In this case, the business partner has to sign an agreement with the life insurance company, and the proceeds after selling the shares will be paid to the policyholder’s nominee. It must be noted that the dependents or nominees of the policyholders do not get any stake in the company.
How does life insurance?
Know about the benefits of life insurance. Now let’s know how to do it. To buy the right life insurance, you need to understand what type of insurance you need and how much insurance premium you want to buy. Because the higher the premium, the higher the amount of money you will receive after the expiry of the term or at the time of compensation.
But remember, just the amount of money received does not mean it is profitable. There are several other things that you need to consider, such as premium policy, return policy, tax policy, nominee policy, maturity benefit, etc.
First, you must decide how many years of insurance you want and how much premium you will pay monthly. Currently, there are two types of life insurance you can get. One is term insurance, and the other is life insurance. Apart from this, know about the coverage and other benefits of the policy.
Remember, it’s an asset you’re doing for the family. So don’t be fooled by the ads or agents of just one insurance company; do your own research to see which company offers you the best offer. Decide by contacting the insurance office without taking insurance from a local insurance agent.
After making the final decision, keep your documents like a national identity card, driving license, passport, proof of source of income and nomination papers, etc. Finally, sit with the insurance agent or officer, fill out the form with the required information, and pay the first amount of the premium.
Life insurance fraud
You might be considering the near future and depositing monthly premium money from your hard-earned income. But suddenly, you find out that your insurance agent is a fraud and he is taking the premium money of many others like you.
This kind of incident is frequently happening in Bangladesh. By pretending to be an insurance agent or opening a fake insurance company, many fraudsters are stealing people’s hard-earned money by offering more benefits at lower premiums.
So before buying any insurance, check their background, agent authenticity, office authenticity, company reviews, and website. It is best if you can see everything yourself to be sure. Don’t lose everything to a flashy advertisement or the lure of higher profits.
Some important information
In this long discussion, we have presented the benefits of life insurance and other important information—detailed strategies to survive insurance fraudsters. So don’t delay and get down to work now.
Because a proper decision on your part will provide financial security to your family in case of any future accident, remember, this decision of yours will help your family even in your absence, and you will be in their prayers and memories every moment.