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Life Insurance

One of the most well-known types of insurance product is life insurance. And this does very much what it says on the tin - it insures against the life of a person.

Thus, if the policy holder (the one that takes out the life insurance product) dies, then the insurer (the company that provides the insurance) pays a specified benificiary the relevant sum of money.

There are occasions, depending on the type of policy taken out, where other circumstances can lead to a payout on a life insurance policy as opposed to death. These can include events such as being critically ill or terminally ill.

There are some reasons that people might feel uncomfortable or uncertain when considering life insurance. The first is simply that most people do not particularly like to think about their own mortality - it is not the most cheery thing to consider your own death and what would happen afterwards. Therefore many do not like to think about such things. The second issue that some wonder is that, if they are dead, then what does it matter what happens afterwards? Well, for anyone with a family, relations and/or loved one, the purpose of life insurance is peace of mind whilst alive that, in the event of death, then there will be suitable financial cover for those relatives and loved ones.

As with any insurance product, there will be a lot of detail to the actual cover and so anyone taking out life insurance will need to consider carefully what type of life insurance policy they require. Insurers will specify what is and isn't covered under a life insurance policy - for instance claims relating to matters such as suicide.

The way in which the sum of money is dispensed upon a claim varies from country to country; typically the money from a life policy would be included in the estate for inheritance tax purposes, although policies could be in trust and hence possibly outside of an estate.

With regard to the cost of insurance, there are a range of factors that are typically taken into account with regard to life insurance policies. These factors can include age, gender, where a person lives and whether the person taking out the policy smokes or not, together with information on a person's health and indeed also their family health history (such as whether there is history of early-onset conditions such as diabetes in the family).

There are a huge number of providers of life insurance and so a good way to get a feel for costs is simply to use some online comparison sites in the country you live in and get a feel for costs as a result and the specific types of cover available (eg life, critical illness, mortgage and critical illness) and so forth.

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