Life Insurance
An insurance policy, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.
Term life insurance provides coverage for a specified period (the "term") and pays a death benefit to beneficiaries if the insured person dies during that term. It is a straightforward and cost-effective way to protect your family financially in case of your untimely death during the policy's duration. If the policyholder outlives the term, there's typically no payout.
Here's a more detailed explanation
Key Features:
Specific Term: Term life insurance policies have a defined period of coverage, such as 10, 15, 20, or 30 years.
Death Benefit:If the insured person dies during the term, the policy pays a predetermined sum of money (the death benefit) to the designated beneficiaries.
How it Works:
You select a term length and coverage amount and pay premiums regularly (monthly, quarterly, or annually).
Annuities in life insurance are financial contracts where you pay premiums to an insurance company in exchange for regular payments, typically for retirement income. They are designed to provide a stream of income, either immediately or deferred, and are often used as a retirement planning tool.
Here's a more detailed explanation:
What is an annuity?
An annuity is a contract between you and an insurance company where you make premium payments (either lump sum or regular) and the insurer provides you with regular payments, either immediately or at a later date.
These payments can be for a fixed period or for the rest of your life, depending on the type of annuity.
Annuities are primarily used for retirement income planning, helping to address the risk of outliving your savings.
How does it work?
You choose an annuity plan that fits your needs and make either a lump sum payment or regular premium payments to the insurance company.
The insurance company invests your money and the investment grows over time. In some cases, this phase can be skipped, and payments can start immediately.
When the payout phase begins, the insurance company will start making regular payments to you, either immediately (immediate annuity) or at a later date (deferred annuity).
You can choose from various payout options, including life annuity (payments for your lifetime), joint life annuity (payments for your lifetime and then your spouse's), or annuity with return of purchase price (payments for your lifetime, and the initial investment is returned to your beneficiary).
Key benefits of annuities
Different types of annuities:
Payments start at a later date, allowing your investment to grow.
Insurance has to be purchased when it is not needed because it cannot be purchased when it is needed.
Life insurance acts as a safety net for your family. Every earning member carries important responsibilities and financial commitments. In the unfortunate event of an unexpected death, the loss can bring emotional and financial hardship to the family.
Life insurance offers peace of mind by ensuring that your loved ones remain financially secure even in your absence. It provides essential support to help maintain their standard of living, cover daily expenses, and plan for the future.
Protect your family's future—because one loss shouldn't take everything away.