Life insurance is no longer unfamiliar to the public due to the development of society’s demand for cost-effective services, health protection, and the construction of future lives, which are always of concern. However, to clarify the concept of life insurance, its benefits, and the common types of insurance today, what should be noted when purchasing? Let’s explore the content of the article below!
1. Concept of life insurance
Life insurance is a product provided by an insurance company under the management of the state to ensure financial benefits for policyholders regarding health, body, and life issues. Policyholders are responsible for paying premiums regularly, whether monthly, quarterly, or annually, depending on the initial agreement. Both the responsibilities and benefits of the insurance company and the policyholder are clearly stated in the contract terms.
2. Benefits of life insurance
Life insurance has long been known as a financial tool that brings many practical and meaningful benefits to human life. Some notable benefits include:
- Building a frugal lifestyle, saving for the future
- Demonstrating responsibility for oneself, family, and society
- In the event of risks such as health issues, bodily harm, or loss of life, policyholders will receive corresponding payouts, proactively addressing financial concerns for family members.
- When bundled with supplementary insurance products, policyholders gain access to the best healthcare services.
The most common types of life insurance today
Based on the scope of coverage, life insurance is divided into 5 types as follows:
- Whole life insurance
- Term life insurance
- Endowment life insurance
- Regular premium mixed life insurance
- Retirement insurance
Each type of insurance has different premium payment levels and profit interest rates. To decide which type of insurance to participate in, customers need to thoroughly understand each type of insurance, then determine their purpose and insurance participation needs.
3. Considerations when purchasing life insurance
To avoid unnecessary misunderstandings and, most importantly, to use life insurance services with peace of mind, policyholders should pay attention to thoroughly understanding the following issues:
- Clearly and accurately declare personal information and information about the designated beneficiaries. These details need to be carefully verified, especially personal identification documents.
- Immediately inform the insurance company when there are changes to personal identification documents, even if you are not facing any risks.
- Understand the premium calculation, payment, payment period, and the benefits to be received in case of an incident.
- Understand the entire process, including documentation and procedures, in the event of an incident.
- Inform your designated beneficiary or family members that you are participating in life insurance and how to contact the insurance company in case of an issue. This will help your family members receive payouts in case of bodily harm or loss of life.
Cre: Marie/linkedin.com
