Getting insurance is one of those "life" things you should think about early in your career, especially while you can still work and make money. Not only are younger people better able to pay for insurance, but they also pay less. One of the rules of insurance is that you have to do this. Younger people are less likely to die, so their rates are lower than those of older people.
Insurance will protect you and your family financially in the future. Depending on the type of insurance you choose, it can cover your health, your retirement, and even your death and burial.
But even though it's important to be prepared for the unexpected, some people still don't want to get insurance on their own. Instead, they want their companies to take care of it. All that insurance jargon tends to confuse and sometimes even scare people, just like legal jargon does.
Here are some of the most common questions about insurance that he gets asked.
What kinds of insurance are there?
Insurance comes in two main forms. Both the life insurance and the other insurance. As the name suggests, life insurance protects the person's family in case something happens to him. When an insured person dies, the money he insured will go to the person he chose as the beneficiary.
The insurance that protects things other than people is called "non-life insurance." There are many different kinds of things that fall into this group. There is car insurance, which protects cars from damage in case of an accident. There is also property insurance, which protects homes from fire and other types of damage. Most banks have deposit insurance to protect their customers' money in case the bank has financial problems. And there is health insurance, which helps pay for medical and hospital costs. The most common types of non-life insurance are health insurance and car insurance.
Some insurance plans also pay for things in the future. Some of the insurances are plans for retirement and plans for death that cover the cost of a funeral.
What's the difference between a premium and the amount that the policy covers?
The amount you have to pay for insurance every year is called the "premium." Some insurance companies also let their clients pay their premiums in monthly instalments. On the other hand, the face amount is how much you have insured yourself for. For example, if the face amount of your policy is $500,000., your beneficiary will get $500,000. when you die.
What does "double indemnity" mean?
Some insurance policies have a "death by accident" clause that will double the face amount if it can be proven that the death was not planned. This is done to protect the family of the insured in case the insured dies too soon. Double indemnity means that if the death was an accident, the face amount will be doubled.
Is the legal spouse always the person who gets the money?
No. Contrary to what most people think, the beneficiary is not always the spouse. It's up to the person to decide who will get the money. It can be anyone in the family as long as there is an insurable interest. If the children are named as beneficiaries and they are still too young to handle the money on their own, a guardian will be named.
