Insurance Articles
31 July 2008
Life Insurance - Why is it Necessary?
Life insurance, essentially, works on the principle that you pay a premium -monthly or annually - to a life insurance provider in return for which the provider agrees to pay an agreed sum to your dependants in the event of your death. As such, a life insurance policy is a long-term commitment and is not intended to be "cashed in" early; indeed, some policies have no cash-in value at any time.
Life insurance premiums vary according to the amount of money to be paid out in the event of your death - known as the "sum assured" - your age, health and occupation. If you have a spouse, partner and/or children, however, you should consider sufficient life insurance cover to pay off your mortgage, credit card debts, etc., and to replace some, or all, of your income. Typically, life insurance cover equivalent to ten times your gross annual salary should be sufficient to provide for your loved ones.
In addition to providing valuable financial protection in the event of your death, life insurance can also provide a clearly-defined means of long-term saving. Indeed, many life insurance providers have a wealth of experience in successful investment. You may also like to consider some of the optional extras that can be bought as an addition to whole life insurance policies; it may be possible, for example, to include injury or critical illness cover, such that your premiums are maintained if you cannot work or you receive a lump sum if you develop a serious illness.
© Upshot Media Ltd
Life insurance premiums vary according to the amount of money to be paid out in the event of your death - known as the "sum assured" - your age, health and occupation. If you have a spouse, partner and/or children, however, you should consider sufficient life insurance cover to pay off your mortgage, credit card debts, etc., and to replace some, or all, of your income. Typically, life insurance cover equivalent to ten times your gross annual salary should be sufficient to provide for your loved ones.
In addition to providing valuable financial protection in the event of your death, life insurance can also provide a clearly-defined means of long-term saving. Indeed, many life insurance providers have a wealth of experience in successful investment. You may also like to consider some of the optional extras that can be bought as an addition to whole life insurance policies; it may be possible, for example, to include injury or critical illness cover, such that your premiums are maintained if you cannot work or you receive a lump sum if you develop a serious illness.
© Upshot Media Ltd
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