Everyone wants to build a safe and secure future for them and their families. The best way to secure the future of your family is by having an insurance policy. Insurance is an agreement between you and the insurer, who promises you to compensate your family in case of your sudden death. It is a great way to have coverage for different types of risks and attain financial stability. There are various types of insurance policies offering varying types of benefits with different terms and conditions. The insurance policy covers all kinds of losses and damages and compensates you in case of the occurrence of an unwanted event.
The policyholder needs to pay a specific amount as a premium every month, and in case he dies while the policy is active, the insurance company will pay the claim to the nominee. There are various types of insurance policies, and you need to choose the best and most useful one out of them. It is a challenging task to do as you need to have profound knowledge about all the working and terms of the insurance. There are some common terms related to insurance that can help you to understand how life insurance works and will help you to choose the best insurance policy.
Common and useful terms related to life insurance
Before getting your life assured, you must know that what is the actual meaning of life insurance. Life insurance is a contract between you and the insurance company. This contract ensures that the insurance company will pay a specific amount to your nominee as a claim in case you die while the policy is active. To make your nominee receive a claim after your death, you must pay a specific amount monthly as a premium. Premiums are necessary to obtain proper claims without any hassles.
An agent is a person that offers you the best insurance policy and makes your life assured. He mostly works with an insurance company, and his work is to attend the customers and sell as many policies as he can. There are some independent agents also who are self-employed and work for different companies on a commission basis. The agent must have a proper license to work as an agent and must have profound knowledge about all aspects related to the insurance. They can clear all your doubts and cal also help you to choose the perfect insurance policy with maximum benefits.
It is a common term that you will hear while getting life insurance. There are some underwriting expenses that the insurance company has to bear while underwriting your policy, and the company charges some portion of that amount from you, and these charges are termed as expenses. These expenses include the costs of different things such as medical checkups, advertisement charges, commissions, fees of underwriting, charges of the agency, etc.
The policy is a piece of the document containing all the details related to your insurance. The insurer or the insurance company can only issue it. There are different types of insurance policies, depending on the duration of the policies.
The beneficiary is the person who will get significant benefits from your insurance policy after your death. You assign anyone as your beneficiary, and it is not necessary that he should be a person. It can also be a trust or any charity organization.