Generally speaking, insurance is a form of risk management that transfers a certain amount of risk from the policyholder to the insurance company, in exchange for a particular fee.
There are many types of policies available on the market, but the most popular are those regarding life insurance.
This particular type of indemnification means that, in case anything bad were to happen to the buyer, the insurance company would be bound to pay monetary compensations to his/her descendants or to other specified beneficiaries.
Some variants even include the obligation to replace the costs of the burial and any estate fees that might occur.
When deciding to get life insurance, the first thing you should do is choose the size of the policy.
You can do this either by multiplying your current annual income by 10, or by determining how much money you would need to pay off all your debt (mortgage included) and the funeral costs.
Whatever strategy you choose, make sure that the sum isn't too large, so that you will be able to actually pay the premium as well.
Then, you ought to decide on the type of insurance you want.
For instance, the basic option is term life insurance, which is written for a specified period of time (such as 5 or 10 years); after the policy expires, you can renew it, but the premium will become more expensive every time.
A good alternative is whole life insurance, which has a savings account attached.
This means that every time you pay the premium, part of it goes into the insurance and the remainder becomes an investment.
In the former case, the premium is only paid after the death of the insured party; in the latter, the benefits are paid when the policy expires, even if he/she is still alive.
Finally, there are many more options available if you want to buy a life insurance policy.
It's just a matter of analyzing your needs and preferences and deciding which one is best for you and, more specifically, for your family, as they are the ones that will eventually benefit from the indemnity.
There are many types of policies available on the market, but the most popular are those regarding life insurance.
This particular type of indemnification means that, in case anything bad were to happen to the buyer, the insurance company would be bound to pay monetary compensations to his/her descendants or to other specified beneficiaries.
Some variants even include the obligation to replace the costs of the burial and any estate fees that might occur.
When deciding to get life insurance, the first thing you should do is choose the size of the policy.
You can do this either by multiplying your current annual income by 10, or by determining how much money you would need to pay off all your debt (mortgage included) and the funeral costs.
Whatever strategy you choose, make sure that the sum isn't too large, so that you will be able to actually pay the premium as well.
Then, you ought to decide on the type of insurance you want.
For instance, the basic option is term life insurance, which is written for a specified period of time (such as 5 or 10 years); after the policy expires, you can renew it, but the premium will become more expensive every time.
A good alternative is whole life insurance, which has a savings account attached.
This means that every time you pay the premium, part of it goes into the insurance and the remainder becomes an investment.
In the former case, the premium is only paid after the death of the insured party; in the latter, the benefits are paid when the policy expires, even if he/she is still alive.
Finally, there are many more options available if you want to buy a life insurance policy.
It's just a matter of analyzing your needs and preferences and deciding which one is best for you and, more specifically, for your family, as they are the ones that will eventually benefit from the indemnity.
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