What is life insurance?

The insured amount to be paid, by the insurer, on death of the person is called Insurance. Life insurance is a protection plan and is regarded as the main tool of financial planning. Life is uncertain and it is always good to insure as it would help the other family members or dependents.

The life insurance company insures the person for a specific amount. The amount of premium depends upon how many years and amount to be insured (coverage). Age also is a factor while considering a life insurance policy. The person who is insured should provide all the information correctly including his health position, as life insurance is an agreement between both the parties and is also called as a contract in good faith.

The insured should provide all the details like age, family history, health etc correctly. The amount of premium is very very low compared to the amount, which would be provided in case of death. Life is uncertain and to protect your dear and near ones it is advised to take a life insurance policy.

There are two types of insurance policies, one is term insurance and the other is permanent insurance. It is important to plan and decide which policy your family needs. You have to take into account the amount of loans, mortgage etc before you decide on a life insurance policy.