Definitions of Life Insurance

People take out Life Insurance policies to cover their life and a Life Insurance policy can only be redeemed upon the death of the person who is insured.  By paying a monthly premium which is usually based upon a number of various factors, the beneficiary of the policy will be able to claim a lump sum of money plus the bonuses that it has earned over the years, when the insured person dies.  Although the person who is insured never benefits from the Life Insurance themselves, they will have the peace of mind during their lifetime in the knowledge that the remaining family will not have to worry about their funeral costs or any other debts that they need paying.  Usually it is the person who is insured that is the policy holder and will name the beneficiary.  In some cases the Life Insurance policy may have been taken out by another member of the family to cover the life of their parents or partner.  Whoever has taken out the policy is classed as the policy holder and the insured is the name of the person whose life is covered by the insurance.  Before taking out any Life Insurance policy the Insurance Company will want to know the general health of the person to be insured, their occupation, their age, family medical history and if they have any particular hobbies that are dangerous where they might receive fatal injuries for example mountaineering or motor racing.

Having filled in the application form the Insurance Company will then be able to give a quote depending upon the answers that are given.  Having agreed a figure for the premium this amount must be paid every month as the policy will be cancelled if payments fall behind.  Life Insurance can also be taken out in different ways. Most people prefer the policy whereby a lump sum of money is paid upon the death of the insured and the premium paid monthly will not increase over the years. However, there are different options such as endowment life insurance, universal life insurance and whole life coverage.  Although all of these Life Insurance policies cover the life of the person insured the funds to cover life insurance is by different methods so it is always better to make sure that the policy taken out is the one to suit you best.  As with nearly everything, nothing stays the same, and with some policies it is possible to have them reviewed every few years and maybe increase the monthly premium if necessary.  Always check the small print before signing up to any Life Insurance policy and if still undecided take professional advice which is readily available.