What Is Life Insurance And How It Works?

By SiliconIndia   |   Friday, November 28, 2014
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BANGALORE: The loss of breadwinner in the family is heartbreaking. Though nothing can compensate for the pain and void he leaves behind, the breadwinner can still make his absence slightly less painful by providing financial protection for his family.

Every responsible and prudent person must ask himself this question – how will his family get by without him? Will they have enough money to pay the outstanding loans and meet household expenses? Will his children get the education that he always wanted to give them?Will the family cope with their marriage expenses?

Life insuranceprovides financial stability for your family when you are not around. With life insurance you are assured that your family will be able to meet their financial needs. They won’t have to approach relatives or beg for favours. They will be independent enough to meet expenses and pursue what you always wanted them to pursue.

Think of life insurance as the safety net or the life jacket for your family. If you don’t own one, you or rather your family could be in considerable trouble in your absence.

How Life Insurance works?

When you buy a life insurance policy, you pay a ‘premium every year over the ‘term’ of the policy. The premium amount and policy term can vary depending on your needs and financial objectives. In an eventuality over the term of the policy, your family also called ‘beneficiaries’ will receive a fixed amount of money. The amount known as the ‘sum assured’ is pre-determined. The sum assured along with the term of the policy determine the annual premium you must pay to keep the policy active.

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