FAQs

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Life insurance is a contract between an individual and an insurance company. In exchange for regular premium payments, the insurance company provides a lump sum payment (known as a death benefit) to the designated beneficiaries upon the insured person's death.

Life insurance provides financial protection for your loved ones in the event of your death. It can help replace lost income, cover outstanding debts, pay for funeral expenses, fund your children's education, or provide an inheritance.

There are several types of life insurance, including term life insurance, whole life insurance, universal life insurance, and variable life insurance. Term life insurance provides coverage for a specific period (e.g., 10, 20, or 30 years), while permanent life insurance (whole, universal, and variable) offers coverage for the entire lifetime of the insured.

Term life insurance is temporary coverage that provides a death benefit if you die within the specified term. Permanent life insurance, on the other hand, offers lifelong coverage and includes a cash value component that grows over time. Permanent policies also have higher premiums compared to term policies.

The appropriate amount of coverage depends on various factors, including your income, debts, lifestyle, and financial goals. A general rule of thumb is to have coverage that is at least 5 to 10 times your annual income. It's recommended to assess your specific needs and consult with a financial advisor or insurance professional to determine the right amount.

With some types of life insurance, such as term policies, you generally cannot change the coverage amount or the length of the term once the policy is in place. However, some permanent policies may offer flexibility, allowing you to adjust the death benefit or premium payments over time.

Insurance premiums are influenced by factors such as your age, health, occupation, lifestyle, and the amount and type of coverage you choose. Generally, younger and healthier individuals pay lower premiums compared to older individuals or those with health issues.

It depends on the specific condition and its severity. While some pre-existing medical conditions may affect your insurability or premium rates, many insurance companies offer coverage options for individuals with various health conditions. It's advisable to shop around and work with an insurance professional who can help you find the right policy for your situation.

When the insured person passes away, the designated beneficiaries need to file a claim with the insurance company. They will typically need to provide a copy of the death certificate and any other required documentation. Once the claim is processed and approved, the beneficiaries receive the death benefit as a tax-free lump sum payment.