Relax, Your Life Insurance Questions Answered
Have you ensured that your family is protected from the uncertainties of life?
You should. Death is an uncomfortable topic, we know. But what is more uncomfortable is the thought of what will happen to your dependants if you are not there to take care of them. Nothing can replace you, but Life Insurance can make your passing easier for your loved ones. Having a solid Life Insurance policy in place goes a long way to ensure that they are well taken care of in the event of your demise.
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Keep in mind that Life Insurance varies from individual-to-individual. To help you buy only the life insurance you need, here is a guide to help you make an informed choice.
- What is Life Insurance?
- What are the types of Life Insurance?
- Do I need Life Insurance?
- What are riders?
What is Life Insurance?
Life Insurance is a contract between an individual and an insurance company, where the insurance company is obligated to pay a certain amount to the individual’s beneficiary(ies) in the event of the insured person’s death, in exchange for premium.
Life insurance is available to everyone, regardless of age, gender, or marital status. The premiums vary from person to person, and life insurance companies offer you a life insurance policy based on your needs in terms of coverage.
Life insurance can also:
- Pay off your debts when you die
- Replace or complement your income in the event of disability
- Be used as an investment platform
A useful guide to determine how much coverage you need is 8-10 times your annual income. This will offer your dependents a solid base to build a life in the event of your death.
What are the types of Life Insurance?
There are many types of Life Insurance. The most common offered policies include:
- Endowment Life Insurance pays a sum of money to your beneficiaries if you die during the duration of the policy and pays a sum of money to you if you survive to the end of the policy.
- Whole Life Insurance pays a sum of money to your beneficiaries when you die.
- Term-Life Insurance only pays a sum of money to your beneficiaries if you die during the term of the policy.
- Credit Life Insurance offers insurance linked to loans and mortgages taken from financial institutions. If you die before repaying the loan the insurance company will ensure the loan is paid off.
Do I need Life Insurance?
You may need life insurance if you are:
- Looking for a secure investment to grow wealth.
- A parent with children under the age of 18 years.
- A co-owner of property looking to secure your investment.
- Looking to have special care in your sunset years.
- Looking to have burial and funeral costs for you or a loved one covered.
What are Riders and why should I take them?
Riders are benefits that come as complements to your Life Insurance plan and offer additional benefits to you at a relatively low cost. Riders may include:
- Accidental Death Benefit: This is an additional amount equal to the sum assured (guaranteed amount your beneficiary will receive in the event of your death) that will be paid if you die in an accident.
- Total & Permanent Disability Benefit: This is an amount equal to the sum assured that will be paid to you over an agreed upon period if you become disabled due to an accident.
- Waiver of Premiums: If you become totally and permanently disabled because of an accident or illness, all future premiums will be waived, and the policy will remain in force.
- Accident Hospitalization Benefit: In case of an accident leading to the injury and hospitalization of the life assured, the insurer will reimburse the medical expenses incurred subject to a maximum agreed upon amount.
- Last Expense: This is a fixed amount that will be paid to your named beneficiary in the event of death.
Like any other financial product, never purchase a Life Insurance product you do not fully understand. Do not be afraid to ask questions.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product.
Written by Anthony Adungo, Digital Sales and Marketing Officer, Jubilee Life Insurance Limited on 10th August 2021