Before you decide to buy a life insurance policy, it would be a wise idea to read or ask not only about the details of the policies, but also understand that each life insurance policy involves four parties. Understanding the role of all these four players will help improve understanding of how life insurance works. This will also help you decide which life insurance policy is most suitable for you. These four important players are:
1. The Insured
The insured is the person on which the life insurance policy is based. The various factors like age, health, employment and sometimes where this person resides determine the rates, or premiums, that will be charged for the life insurance policy. In case of the death of this person while policy is in force, the life insurance policy proceeds would be payable.
2. The Insurer (Insurance company)
The insurer is the insurance company that offers the policy and is responsible to pay out in case their liability is triggered. The insurance companies are highly regulated and based on their mathematical algorithms, these companies decide the rates an individual should pay to have a specific life insured.
3. The Beneficiary
The beneficiary is the person named in the policy designated to receive the proceeds of the life insurance policy in the event of the death of the insured. This person could be a spouse, parent, child or other close family member. In a few cases, the beneficiary could also be a business partner or non-profit organization.
4. The Policy Owner
In the majority of the cases, the policy owner is also the insured. For example, a husband takes out an insurance policy on himself so that the financial future of his family is insured, he buys and pays for the policy, so he is both the owner and the insured. However, when a father buys a life insurance policy in his son’s name, the father becomes the owner of the policy. Another example of this is when a company takes out a life insurance policy on a key employee or partner.
Life insurance is one of the best tool to not only safeguard the future of an entire family, sometimes (based on the features of the insurance policy) it could also be a way to savings and financial gain specially when the insured survives the tenure of the purchased policy. Should you require more information or wish to buy a suitable life insurance policy, call us at 9818510748.
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