What is Life Insurance?

The main purpose of Life Insurance is to provide money for those people who may depend on you financially in the event that something should happen to you. These people could include family members or business partners.

It can provide the reassurance of financial protection for you, your family and your business associates.

A Life Insurance policy pays out a sum of money when the person who is covered by the plan dies. The money is intended to pay off any outstanding debts and support your dependants financially by providing them with a further lump sum or a regular income if you die.

Even if there are no dependants who may be financially affected by your death, some Life Insurance policies could go towards covering funeral costs.

The type of Life Insurance and the amount of cover will depend on an individual’s particular circumstances and requirements. Factors to consider will include age, dependants, level of income and financial liabilities.

Premiums are normally paid to the insurance company either monthly or annually for a fixed period of time or, in some cases, until death.

Types of Life Insurance

While the overall concept of Life Insurance is fairly easy to understand, there are some complexities.

Most importantly, there are different types of Life Insurance products, covering Term Insurance, Whole of Life, and others.

The many options and flexibility of Life Insurance can make it a powerful instrument in your financial planning toolkit.

Please be aware that in some cases this type of insurance is based on an assessment of the health of the applicant.