Life insurance also has special coverage against death risks, and the insured people can get the appropriate life cover plans from the insurance company by paying a sum as an insurance premium and choosing the desired coverage. In life insurance, the insurer enjoys many benefits during life, and in case of death, his family and beneficiaries enjoy various benefits.
Insurance companies also provide this policy as a long-term investment that will be very useful for applicants. However, life insurance as a long-term investment has more advantages than investing in a bank.
Life Insurance Coverage
Insurance companies offer life cover plans in different fields according to the conditions and needs of insurers and the insurance company policies. Life insurance includes complete life cover plans, term life insurance, life and investment insurance, plans for children, pension, and group insurance. Life insurance coverage contains primary and supplementary coverage, including natural and accidental death. This means that in the event of the insurer’s death naturally or accidentally, the insurance company has to compensate the beneficiary. Supplementary coverages may vary from insurance companies, but in general, these coverages include the following:
- Coverage of specific diseases (types of cancer, heart attacks, strokes and heart surgery)
- Coverage of disability
- Exemption from insurance premium payment in case of disability
Reasons to Use Term Life Insurance
Life insurance is a kind of long-term investment with practical benefits and financial support for the family. People at different times of life and in different situations seek to create secure financial conditions for themselves and their families. One of the ways to secure and maintain the financial future of families and individuals is using life cover plans. Insurance companies offer this policy in different types and with various coverages to provide adequate financial support for all family members in different situations, including accidents by the head of the family, retirement and illness. The three main reasons people use life cover plans are:
- Provide capital at retirement, disability or old age
- Providing the capital of family members in case of an accident for the head of the family
- Use different coverages to offset financial costs in certain circumstances
In this article, we will discuss the essential benefits and different dimensions of life cover plans.
Life Insurance Benefits
In addition to providing savings and capital, life cover plans have other benefits that are discussed in this section:
- Tax exemption
Capital and savings of life insurance policies are entirely exempt from tax, and no tax is accrued on them. In addition, inheritance tax does not apply to the death reserves of this insurance, and this amount is paid in full immediately after the person dies.
As life insurance savings and capital increase, the value of this insurance increases and it is also used as a guarantee.
- Get a mortgage
One of the crucial advantages of having life and investment insurance is the possibility of getting mortgageson capital and insurance reserves. Individuals can get a mortgage without having a guarantor and collateral on their insurance reserves, and at the same time, if necessary, use this insurance coverage.
- Identify the beneficiary of the insurance contract
In this insurance, the insurer can identify the beneficiary so that in case of death, the insurance company can pay the capital of death and reserves to them. However, in life cover plans, it is also possible to change the insurer and the beneficiary. More interestingly, the insurer can also determine the share of each stakeholder.
- Flexibility on premium term
Individuals can easily change various life insurance terms such as coverages, premiums and so on. It is also possible for the insurer to choose how to pay the insurance premium. You can choose to pay the premium in one, two months, six months or annually at the time of purchase. This is a great option; because it provides much flexibility for the insurer to plan payments and choose his schedule. People who have a plan for their life and future think about the benefits of insurance. They plan to see when the best time to use their investment. Then they can easily use the services of insurance companies.
- Life insurance coverage
Life insurance coverage is valid in all parts of the world, and in case of death, accident or illness, a person can use this insurance coverage. In addition, everyone can determine the amount of premium payment according to their budget.
- Flexibility on repurchase or investment
No one is aware of what will happen to them in the future, and we are constantly faced with probability and uncertainty. Sometimes the insurer needs the insurance capital earlier than its due date. In this case, the insurer can use the redemption option. However, this is usually possible from the second year of insurance onwards. In case of redemption in the first five years, and the insurer will suffer due to deduction of insurance costs that are part of the coverage. Also, your premium paid after deduction of expenses is considered a reserve, and the compound interest will be allocated. The total investment amount is produced together with interest, lump sum or monthly (depending on the choice of the insurer).
This article provided different life cover plans, their coverages, reasons for using them, and the benefits of various life cover plans. The main advantages of life cover plans include tax exemptions, guarantees, mortgages, flexibility in selecting stakeholders and paying premiums, and side coverage of life cover plans. Talk to AWS Mortgage expert advisors to get the best plans based on your financial situation. By providing consulting services regarding life cover plans to contractors, workers and professionals in various sectors, AWS Mortgage specialist advisors are thoroughly familiar with the plans provided by the insurance company and introduce the best options to you according to your needs.
Ashley Slade is a Business and finance Expert and Writer at AWS Mortgages at London. We offer our clients, with diverse income streams and resources, a tailored financial solution.