What Is Life Assurance?
By nature, insurance policies are designed to protect someone against an event that might happen. The policy holder pays an insurer a yearly premium to cover a specified risk. These risks might be related to items such as auto accidents, fire, health, injury, and accidental death. The only thing that is guaranteed is natural death. That is where life assurance comes in.
Life assurance is an insurance policy that pays a policy holder at the event of death. The policy holder pays in a monthly amount just like a normal insurance policy. They may also invest money into the policy. At the event of natural death, the policy pays out what was paid into it plus the investments. Granted, the benefits of the policy will go to the beneficiaries of the policy holder but it is a good way to leave something behind for your family.
What Is The Difference Between Life Assurance and Life Insurance
There are already regular life insurance policies that you can take out. So what is the difference between a life assurance policy and a life insurance policy? Over the past few years the line between the two has been blurred a bit as more companies have combined the two different types. But in general, the difference between the two is that a life insurance policy has coverage for a set amount of time in which the event can happen. It only pays out if the person covered should die while the policy is in effect. If the person outlives the term of the insurance policy, then the policy cancels and the person is left without any coverage.
Life assurance has no set time and is guaranteed to pay out in the end. Also, a life insurance policy will only pay a set amount. Life assurance can increase as investments to the policy are made. So the value of the policy will increase over time. You can also cash in on the life assurance policy early. If the policy holder decides to cancel their policy before the time of death, they can get their total sum of coverage plus total investments. However, to discourage this, most insurance companies charge a heavy penalty for cashing out assurance policies before their time.
Do I Need Life Assurance
Does anyone need life assurance? It is an important question that everyone should consider. For the most part, it seems like a good idea if you have family that you will leave behind after you pass away. Of course, money cannot replace a loved one but they can at least be left in a better financial position. Let’s face it. The money is not going to do you any good. But having a life assurance policy that you can add to and increase the payout should give you some peace of mind.
Another good reason for having a life assurance policy is if you do not manage to pay off all of your debts by the time you die. You might owe on the mortgage or have several credit cards with high balances that need to be paid. You don’t want to leave those debts for your family to worry about after you are gone.
Also, if you find yourself in financial straits before the end comes, you can cash in on the policy for some additional capital. This can help you out in a number of ways such as paying off bill collectors, medical expenses, possible legal matters, and other unanticipated financial problems.
How Do I Get Life Assurance
Once you have decided that you need life assurance, the next step is finding the right policy. There are dozens of companies on the market that offer life assurance policies. Before you can be covered, a company may run a physical examination on you to make sure that you are insurable. They will do a standard vitals check such as heart rate and blood pressure. They will also run a few blood tests. Depending on your age, you might not have to have a physical exam.
There are some reasonable policies available. A good place to look for companies that offer life assurance is the internet. You can do a search and literally bring up dozens of companies that offer different policies. Check around to a few companies and see what they are offering as far as premiums and base payout. Also see what their penalties are if you need to cash out your policy early. Be sure the company that you are considering is a financially sound company that is capable of paying what they promise. You certainly don’t want to leave your investment at the mercy of some fly-by-night agency. Once you find a suitable agency, try to consistently invest in your policy. The more you invest, the better shape your family will be in when you are gone.
This entry was posted on Friday, January 25th, 2013 at 6:03 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.