You’ve probably heard about life insurance. But not everyone has experienced this type of insurance. Let’s take a closer look at what it is, how it works, and why it’s needed. So, life insurance is a type of insurance that helps to compensate for sudden losses in difficult life situations, when an illness or accident occurs. What is life insurance? Do you have to have life insurance with a mortgage?
Let’s answer the second question right away. Contrary to popular belief, you do not need to take out life insurance in order to get a mortgage. One of the main reasons why people take out life insurance is to ensure that their families are able to carry on paying the mortgage, in the event of your death. Now let’s answer the question about what life insurance is.
What is it?
We are often offered life insurance. At every bank, at every opportunity. But for what purpose? We insure our lives in extreme cases where it’s impossible to refuse, like taking out a mortgage. And most often we do it with annoyance:
- firstly, because we don’t want to think about it;
- secondly – if nothing happens, why pay and lose money.
The word insurance has acquired a negative character, and we have forgotten or do not know why we need life insurance. We have forgotten that it’s not just a way to protect yourself and your family from financial losses in unforeseen situations, but also an opportunity to provide for your old age and even earn money. And you should be as careful in choosing insurance as you are in choosing an apartment, a job or a place for your children to study.
Always read the insurance contract to the end, study the insurance rules carefully, and ask questions of the insurer. Understand what an insured event is in a particular contract (if you are involved in extreme sports, clarify whether your insurance takes into account the risks associated with them). If you terminate the contract prematurely, you risk losing some or all of the premiums – for example, if you terminate the contract in the first year of validity. So pay attention to how the redemption amount for your contract is determined.
Also pay attention to:
- the term of the insurance contract;
- the amount of premiums;
- the frequency of premium payments;
- the allocation of the risk and cumulative portion of the insurance;
- the list of exclusions from the insurance;
- grounds for refusal to pay the insurance;
- conditions of early termination of the contract (including the procedure for determining the amount of the redemption amount).