A life insurance Policy is an agreement between an Insurance Provider and an Individual, known as an Insurance holder. This agreement or contract states that the Insurance provider will pay an agreed amount of cash to the Insurance holder’s family in the event of natural death. This means that death by suicide is not recognized. The payment can also be made to the Insurance holder in the event that he or she falls terminally or critically ill. In order for this to happen, the Insurance Holder makes monthly payments known as premiums. This amount can also be paid as a lump sum. The main advantage of acquiring an Insurance policy is that you will have peace of mind knowing that your family and beneficiaries will be well taken care of when you are gone.
There are Permanent and Temporary or Term Life Insurance policies. A Permanent Life Insurance Policy provides coverage throughout your lifetime, until death. A Temporary Life Insurance policy will only give you coverage during the policy term and not longer than that. It pays the agreed lump sum only if the Insurance Holder dies during the policy term. If the policy term elapses and the Insurance holder is still alive, the Insurer does not make any payments. If you have a Term Life Insurance Policy, it is advisable to renew it at the end of the term if you wish to continue enjoying the benefits of Insurance coverage.