In simple terms, life insurance is an agreement or a contract that you get into with an insurance company. You will be required to pay an agreed amount to the insurance company on a monthly or yearly basis. This amount is referred to as a premium, which is to be paid to the insurance company for a specified number of years.

In the unfortunate incidence like death, the insurance company pays a pre-decided, tax-free, lump-sum amount to a member of your family that you nominate, so that your absence does not hinder the financial standing of your family.

The amount that is insured to you and the premium that you must pay depends upon the life insurance policy that you choose. A higher premium amount entails higher coverage. Life insurance policies are designed to secure a stable future for your loved ones in your absence.

First, you must choose a life insurance policy that suits you. If you’re married and have children, a policy that promises a higher coverage will be beneficial to your children’s smooth upbringing and more importantly, their education. A higher coverage also means that you must pay a higher premium amount. Depending upon the terms of the policy, you can either pay on a monthly or yearly basis.

In the event of an untimely demise, the person you nominate must present the life insurance policy to the insurer and file a claim. He or she needs to submit a death certificate as well as other documents like proof of identity along with the insurance policy. The insurance company shall then, after making sure that no foul play is involved and everything is in order, pay the insured amount to the nominee in total.

Thus, your family’s future is secured and they can realize their dreams even after your absence.