Insurance Machine

There are times when you wonder what will happen to your family if something happens to you. You may not be sick, but you cannot rule out accidents or something which may leave your family without you. Nothing can replace you but if they get some financial help after you go, especially if you are the sole earner in the family and you have dependents on you, then some financial assistance will certainly help.
Life insurance is a contract by which the insurer agrees to pay the beneficiaries of the insured person, a sum of money decided by the insured person at the time of signing the contract. The sum of money is decided by the insurer and accordingly he pays a premium at regular intervals to keep the insurance alive.

The amount has to be decided in advance and the time period is also decided at that time. Normally you insure an amount which could keep your family in reasonable economic condition after you are no more. And the time period is decided depending upon your age. If you are young you may buy the life insurance for a longer period and your premium will be less. If you are at an advanced age then the premium will be much higher.

There are many companies offering life insurances. You have to study them, consult your friends and those who have already bought life insurance and decide accordingly. If you are satisfied with the terms and conditions you can negotiate the premium. The premium is a fixed financial amount which is paid to the insurer regularly till the policy matures or if the insured person is no more. The premium depends on many factors like age and face value of the policy bought. You can choose to pay the premium monthly, quarterly, half yearly or annually but you have to keep to the schedule and pay it without fail or else your policy will lapse.

If you survive the period of the policy then you may get the lump sum when the policy matures. Otherwise, if the insurer dies before the policy matures; the beneficiaries will get the amount once they claim it and produce the death certificate of the insured person. There are certain rules here also. The insured person should die a natural death and not commit suicide as this may be construed as buying insurance just so that the beneficiary gets a large amount of money. There are insurers who put in writing that the insured person should be alive for at least a couple of years before the beneficiaries can claim the money. This is done to prevent the murder of the insured person by the beneficiaries for monetary gain.