Many of us do not know what life is or the benefits of life insurance. As a result, we remain ignorant of this and leave the world without making some provision for our future generations. In today's blog we will try to discuss in detail about life insurance policy and why you should buy life insurance.
Many of us think, why do life insurance? What is the need to take so much trouble? But think about it, maybe your family is solely dependent on you. You yourself can die anytime due to an accident or any fatal disease. What will happen to them in that case?
So one solution to thousands of such potential problems is life insurance. Life insurance allows you to leave a guaranteed savings for your family for any unforeseen event.
What is life insurance?
Before knowing the benefits of life insurance or life insurance, let's know what it is basically? In very general terms, it is a type of savings where you deposit a certain amount of money every month and the insurance company pays you that promised amount in case of any accident or loss.
Was it a little difficult to understand? Usually when we open a savings account in a bank, we deposit some money for a certain period of time in return for certain dividends every month. After a certain period, we do not withdraw that money with interest. But not so with insurance.
Suppose, you take out a life insurance policy of Rs.5 lakhs. Where you have to pay a premium of 3 thousand rupees per month. But the insurance company will not give you any benefit for this 3 thousand rupees. Rather, if you die due to an unexpected accident or illness, they will hand over that 5 lakh rupees to your family which will be a financial help for your family.
So in simple words life insurance is a contract or guarantee arrangement, where you agree with the insurance company to pay compensation to your family after your death in case of any future unfortunate accident by depositing a certain monthly amount.
Benefits of Life Insurance
Life insurance has many advantages as it provides you with special help in case of emergency. As a result, you and your family can be prepared in advance to face any unexpected disaster. Life insurance has several advantages. It is mentioned in sequence below.
1. Post-death benefits
If any unforeseen event happens to the insured, resulting in loss of income to their family, the insurance company compensates them in the form of death benefit. Appointed candidates get the promised full amount and bonus accrued over a specified period of time.
Apart from providing death protection, many life insurance plans also offer monthly income benefits. Such insurance is an excellent benefit for individuals who have reached retirement age and whose income is declining.
But while getting life insurance be careful to evaluate the features and benefits of several plans and select the best one for your needs to provide the best protection.
2. Return on investment
Renowned financial advisors suggest that everyone should invest in a life insurance policy. Not only to provide financial security to the family when you are not there, but also to get excellent return on investment.
Additionally, life insurance is a safer financial instrument when compared to other investment options. The money you have invested in the insurance will be fully paid back to you as guaranteed money at the end of the term or after the death of the insured.
3. Tax Benefits
A significant life insurance benefit is the tax benefit. If you are a salaried employee and purchase a life insurance policy, you may be eligible for a discount.
4. Loan facility
When you need money in an emergency, you can take a loan against life insurance coverage. Almost all major insurance companies now offer loan facilities against insurance to policyholders.
Depending on the terms of the policy, you can borrow a certain proportion of the cash value of the policy or the sum assured. So before you contract for insurance, know the loan policy with the insurer well.
5. Correct financial planning decisions
It is important to plan your financial decisions carefully as you move through life stages. Life insurance can help you in just this case. You can use various term life insurance benefits to provide financial support to the family in case of your untimely death.
This will not only help them fulfill their financial responsibilities, but it will also facilitate a financially independent lifestyle without disrupting their lifestyle. It will help immensely in various important occasions like marriage of sons and daughters, paying for schooling of Panar children and building a dream house for post retirement life.
6. Guaranteed source of income
Another benefit of life insurance is a guaranteed source of income. Your family feels financially secure in your presence. Because you earn regular income to meet their needs. The earnings you earn help pay off debt (if any), house rent, daily bills, children's education and other household expenses.
But what if you suddenly leave this world? Some life insurance policies provide regular payouts, which can cover the loss of income due to the death of an earning family member.
7. Business Security
Currently there are several life insurance companies that offer a facility with their insurance policies. If you bought the policy and run the business, your business partner can buy a share of the policyholder after the policyholder's death.
In this case, the business partner has to sign an agreement with the life insurance company and the proceeds after selling the shares will be paid to the nominee of the policyholder. It must be noted that the dependents or nominees of the policy holders do not get any stake in the company.
How to do life insurance?
Know about the benefits of life insurance, now let's know how to do it. To buy the right life insurance, you need to understand what type of insurance you need and how much insurance premium you want to buy. Because the higher the premium, the higher the amount of money you will receive after the expiry of the term or at the time of compensation.
But remember, just the amount of money received does not mean that it is profitable for you. There are several other things that you need to consider, such as premium policy, return policy, tax policy, nominee policy, maturity benefit.
First you need to decide how many years of insurance you want and how much premium you will pay every month. Currently there are two types of life insurance you can get. One is term insurance and the other is life time insurance. Apart from this, know about the coverage and other benefits of the polic.
Remember, it's an asset you're doing for the family. So don't be fooled by the ads or agents of just one particular insurance company, do your own research to see which company is offering you the best offer. Make a decision by contacting the insurance office directly without taking insurance from a local insurance agen.
After taking the final decision, keep your own documents like national identity card, driving license, passport, proof of source of income and nomination papers etc. Finally sit with the insurance agent or officer fill the form with required information and pay the first amount of premium.
Life insurance fraud
You might be thinking about the near future and depositing premium money every month from your hard earned income. But suddenly you find out that your insurance agent is a fraud and he is taking the premium money of many others like you.
This kind of incident is happening frequently in our Bangladesh. By pretending to be an insurance agent or opening a fake insurance company, many fraudsters are stealing people's hard-earned money by offering more benefits at lower premiums.
So before buying any insurance check their background, authenticity, agent authenticity, office authenticity, company reviews and their website. It is best if you can see everything yourself to be sure. Don't lose everything to a flashy advertisement or the lure of higher profits.
Last word
In this long discussion we have tried to present the benefits of life insurance and other important information. Also detailed about strategies to survive insurance fraudsters. So don't delay and get down to work now.
Because a right decision on your part will provide financial security to your family in case of any future accident. Remember, this decision of yours will help your family even in your absence and you will be in their prayers and memories every moment.