What is life insurance - 5 key benefits of life insurance

What is life insurance - 5 key benefits of life insurance

In transient life, many of us do not know what life insurance is or what the benefits of life insurance are. As a result, we remain ignorant about it without knowing it and we do not leave the world without making some savings for our future generations. In today's blog, we will try to discuss in detail the basics of life insurance and why you should have 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 dependent on you alone. You can die at any time by accident or any fatal disease. What will happen to them in that case?

So life insurance is a solution to thousands of other potential problems. In life insurance, you can leave guaranteed savings for your family in case of any unforeseen event.

What is life insurance?

Before you know the benefits of life insurance or life insurance, let's know what it is. Generally speaking, it is a type of savings where you will deposit a certain amount of money every month and the insurance company will give you the promised amount in case of an accident or loss.

 

Got a little hard to understand? Usually, when we open a savings account in a bank, we deposit some money for a certain period of time in exchange for a certain dividend every month. We do not raise that money at interest after a certain period of time. But not so with insurance.

Suppose you have life insurance of Rs 5 lakh. Where you have to pay a premium of 3 thousand rupees per month. But the insurance company will not give you any profit for these 3 thousand rupees. Instead, if you die in an unintentional accident or illness, they will hand over Rs 5 lakh to your family, which will be financial help for your family.

Simply put, life insurance is a contract or guarantee arrangement where you enter into an agreement with the insurance company to pay compensation to your family after your death in any unforeseen accident by depositing a certain monthly amount.

Benefits of life insurance

Since you get special help in case of emergency, there are many benefits of life insurance. As a result, you and your family may be prepared in advance to deal with an unforeseen disaster. There are several benefits to life insurance. It is mentioned sequentially below.

 

1. Post-death benefits

If an unforeseen event occurs to the insured, resulting in loss of their family income, the insurance company compensates them in the form of a death benefit. Recruited candidates get the promised full money and bonus deposited within the stipulated time.

In addition to providing death protection, many life insurance plans offer monthly income benefits. Such insurance is an excellent benefit for people who have reached retirement age and whose income is declining.

However, when getting life insurance you need to be careful to evaluate the features and benefits of several plans and choose the best one for your needs to provide the best protection.

2. Receipt on investment

Eminent financial advisers suggest that everyone should invest in a life insurance policy. Not only to provide financial security to the family but also to get a good return on investment when you are not there.

In addition, life insurance is a safe financial instrument compared to other investment options. The money you have invested in insurance at the end of the term or after the death of the insurer will be paid to you in full as guaranteed money.

3. Tax benefits

A significant life insurance benefit is the tax benefit. If you are a salaried employee and have purchased a life insurance policy, you may be eligible for a discount.

4. Loan facility

When your money is needed in an emergency, you can take out a loan against life insurance coverage. Almost all large insurance companies now offer loan benefits to policyholders against insurance.

Depending on the terms of the policy, you can borrow a certain proportion of the sum insured or the sum insured. So know the loan policy with the insurer well before you sign the contract for insurance.

5. The right decision of financial planning

It is important to plan your financial decisions carefully as you go through the stages of life. Life insurance can help you in this case. You can use the benefits of various term life insurance to provide financial support to the family in case of your untimely death.

Not only will this help them to fulfill their financial responsibilities, but it will also enable them to live a financially independent life without interrupting their lives. It will be a huge help in various important times like marriage of boys and girls, payment for the schooling of fifteen children, and building a dream house for the life after retirement.

6. the Guaranteed source of income

Another benefit of life insurance is the guaranteed source of income. Your family feels financially secure in your presence. Because you earn a regular income to meet their needs. What you are earning helps pay off debts (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 offer regular pay-outs, which can offset the loss of income due to the death of an earning member of the family.

7. Business security

There are currently several life insurance companies that offer a benefit with their insurance policy. If you bought the policy and run the business, your business partner can buy a portion of the policyholder after the policyholder dies.

In this case, the business partner has to sign a contract with the life insurance company and the proceeds from the sale of shares will be paid to the nominee of the policyholder. It must be remembered that policyholders or nominees do not receive any stake in the company.

How to do life insurance?

If you know about the benefits of life insurance, then let's find out how to do it. To buy the right life insurance you need to understand what kind of needs you have and how much money you want to buy premium insurance. This is because the higher the premium, the higher the amount you will receive after maturity or at the time of compensation.

But remember, just because the amount of money you receive is not enough to make you profitable. There are several other things you need to consider, such as premium policy, return policy, tax policy, nominee policy, maturity benefits, etc.

First of all, you have to decide how many years of term insurance you want and how much premium you will pay per month. Currently, you get two types of life insurance. One is term insurance and the other is life insurance. You will also learn about policy coverage and other benefits.

Remember, this is an asset to you that you are doing for the family. So do not be seduced by the advertisement of a particular insurance company or the words of the agent and research yourself which company is giving you the best offer. Decide not to take insurance from any local insurance agent by contacting the insurance office directly.

After making the final decision, pack your own documents such as a national identity card, driving license, passport, proof of source of income, and nomination papers. Finally, sit down with the insurance agent or officer and fill out the form with the required information and pay the first premium.

Life insurance fraud

You may be thinking of the near future and depositing premium money every month from hard-earned income. But all of a sudden you found out that your insurance agent was a fraudster and he was blown away by the premium money of many more like you.

Such incidents are happening every day in Bangladesh. By pretending to be an insurance agent or opening a fake insurance company, many fraudsters are taking away people's hard-earned money by showing greed for more benefits at a lower premium.

So before buying any insurance, look at their background, authenticity, agent's authenticity, office authenticity, company reviews, and their website. It is best if you can see for yourself everything on the spot. Don't lose everything in a glamorous advertisement or greed for more profit.

Last word

In this long discussion, we have tried to present the benefits of life insurance and other important information. I have also explained in detail the strategy to survive from the fraudsters with insurance. Then get down to work now without delay.

Because making the right decision will save your family financially in the event of an accident in the future. Remember, this decision of yours will help your family even in your absence and you will be in their prayers and remembering every moment.