The concept of life insurance:
Life insurance means insurance that covers material losses arising from the realization of the phenomenon of death or reaching a certain age (life) or both (death and life).
Consequently, life insurance is one of the life risks management policies for the individual to face the financial loss arising from the realization of the phenomenon of death for those who depend on them or for the financial loss resulting from reaching a certain age and the inability to earn. It is a means of coping with the lack of income or interruption of income due to death or reaching a certain age or both.
Life insurance documents
A life insurance policy is a contract whereby the insurance company is obligated to pay the insurance amount to the insured, his heirs, or to the beneficiary or beneficiaries specified in the policy, in the event of the death of the insured on his life, or if the insured reaches his life to a specified age in the policy, in exchange for payment The insured has to pay a one-time installment upon contracting or annual installments.
Life insurance policies can be divided according to the benefits that beneficiaries receive from life insurance into three main sections:
The first section: insurance policies whose amounts are paid to the heirs and beneficiaries in the event of the insured’s death, such as temporary insurance policies, life insurance policies.
The second section : insurance policies whose amounts are paid in the event the insured survives, such as pure endowment insurance policies and life payments contracts (pensions).
Section Three : Insurance policies whose sums are paid in the event of death or life, and they are mixed insurance policies that guarantee payment of the insurance amount to the beneficiaries if the insured dies during the insurance contract period or if the insured personally receives the insurance amount if he is still alive at the end of the insurance period .
12 tips for getting the cheapest and best life insurance
1. Buy life insurance when you are young and your health
The more young and healthy you are, the cheaper the life insurance policy is. The price of the life insurance policy increases with each passing year of your life.
2. Change your lifestyle
Lifestyle is one of the factors that can affect the cost of your premiums. If you are a smoker, your monthly premiums will be more expensive because you are more at risk than non-smokers.
And people with excess weight pay more monthly installments than those with ideal weight.
3. Review the insurance policy regularly
You must review the conditions that you have contracted with the insurance company with the passage of each year and review your material needs annually and compare them with the ones you insured on yourself. If you feel that your material needs have become much more than the time you contracted the insurance policy, and the amount that you have insured yourself will not It is sufficient for your family, because of a new unplanned child, for example, or because your annual income increased in an unexpected way. You must contract a new insurance policy that complements your financial needs.
4. Make your payments annually.
Paying your annual insurance premiums can save you up to 8%.
5. All information must be provided to the insurance company transparently
As part of the underwriting process, you will be required to disclose some personal information such as your lifestyle (Are you a smoker), your salary and your medical history. Although you may not feel comfortable telling a stranger about your personal information, it is imperative that the insurance company know this information in order to create an accurate picture of the risks that will arise from issuing you an insurance policy on your life. This risk will determine your premiums. And do not try to conceal any information from the insurance company, no matter how simple and trivial from your point of view, because if it appears that you failed to disclose any relevant details or information, you risk canceling the insurance policy.
6. Choose a trustworthy insurance company.
A life insurance policy aims to provide financial protection for the people you love when you are not here to do it yourself. Do some homework (research and examination) on the life insurance company you are considering purchasing the insurance from.
There are a lot of insurance companies in the market. It is important to choose an insurance company with a history and reputation in the market (awards and reviews from compensated clients).
To learn more about how to choose a reputable insurance company, whether it is life insurance, car insurance, or even fire insurance, you should review this separate article titled Important Tips for Choosing the Right Insurance Company
7. You must understand that life insurance is designed to protect against the risk of death.
Your primary goal in obtaining life insurance should be to protect your beneficiaries (your children) financially from an income interruption in the event of your death. Therefore, a temporary insurance policy is the best type of insurance policy, and therefore you should buy it and its duration until the youngest of your children reaches the age of 23 and is able to earn.
Whereas life insurance policies that have an investment part, such as life insurance policies or mixed insurance policies, insurance companies say that they have the ability to generate monetary value over time, but the rate of return in them is lower than that prevailing in any other investment in the market and even less than a deposit The money is with the bank, but life insurance policies that have a savings portion are very expensive, so people buy life insurance policies that are less than their actual material needs.
8. Compare insurance companies on a consolidated basis
When comparing the prices of different policies in insurance companies, you should compare the documents that are similar in type, duration of coverage, additional features attached to each policy, and exceptions, and not on the basis of which is cheaper.
9. Take advantage of the “free look” cancellation period.
Most of the laws in most countries of the world when dealing with life insurance give the contractor with the insurance company a period of one or three weeks to cancel the insurance policy and recover his full money that he paid except for the medical examination money and that the insurance company provides the insured with the medical examination bills that it received from the hospital that She did the check.
You must ask the representative of the insurance company about the free cancellation period, and about its start date, and the start and end dates of this period must be mentioned in the contract.
This period allows you to make sure that the terms of the insurance policy are suitable for you. If you feel that the insurance policy is not suitable for your needs, all you have to do is request to cancel the policy and get your money back.
10. Choose a document with a fixed installment from beginning to end, with a known specific amount
You must choose a life insurance policy that is in a fixed premium from the beginning to the end and do not choose the types whose premiums increase with the passage of time, so when choosing a fixed-premium policy and you are contracting with the insurance company, the contract will be written in a specific, well-known and unchangeable way, the amount that the beneficiaries will receive if The death occurred.
11. Read the insurance contract carefully
You must read the insurance contract very carefully and you must understand every term, every word and every meaning, and you must ask more than one person and more than one insurance expert about these terms in the insurance contract. You must read the insurance contract at least three times before signing and three times after signing. And you must make your wife read the contract as well and make her observations on it. You must do that because you will not be present when the death occurs and your wife is listening to the famous word “This is what your husband agreed to ..!”
You must know the exceptions in the insurance contract, which if achieved, you will not receive any compensation from the insurance company, and if you want to insure yourself from these exceptions, the insurance company can negotiate in exchange for an increase in the premium, and among the most famous exceptions is death due to war, revolution, or radioactivity.
12. Life insurance advantages and additions
After reading the insurance contract and knowing the types of death that are covered by the life insurance policy and knowing the exceptions that are not covered by the life insurance policy, the employee of the insurance company will try to offer you some additions in the insurance policy and the advantages in exchange for a higher premium.
Among the most famous additions and advantages that the representative of the insurance company offers to you and which most people choose is insurance against death from a serious illness or insurance against death in an accident, because these additions are among the exceptions in some insurance companies in some countries such as the United States of America.
You should get the features and additions that you really need, such as death in an accident or death from a serious illness, and you must make sure that your current document covers these risks.