You are reading the right article if you are stuck when it comes to choosing the right policy. A life insurance policy is a type of contract between an insurer and insured that guarantees protection against the death of the insured. Having life insurance has since become an integral part of the lives of many people as it allows them to be prepared for the everyday risks surrounding them. There are various life insurance policies available suitable for everyone. For example, people with health problems can easily get access to a no-medical exam life insurance policy; term life insurance is available for those people with short-term needs. There are several functions of an insurance policy.
- Family support
These policies aim to provide financial protection to the loved ones of the insured. They are meant to provide the dependent survivors a financial cushion during that difficult moment in their lives. The policy is intended to help the beneficiaries maintain the lifestyle they are used to.
- Provides capital
Policies avail adequate capital to people in the society who need it. Business people and other entrepreneurs benefit greatly from this.
- Small business operations
Business owners, especially sole proprietors need insurance to protect their business upon their death and in turn provide continuity for them.In a partnership, life insurance with an assigned beneficiary agreement will prevent a portion of the business entity going to a disinterested heir of the partner who may have passed away or an unqualified person.
- Protection of stockholders
Business corporations have policy agreements in place so that so that any unexpected transition or unprecedented hiccups works out smoothly in the end. Both large and small business entities find the need to insure the lives of key employees whose loss would negatively affect the business corporation. In addition to that, life insurance policies allows for strategic planning for future operations of the business.
- Final expenses
Policies cater for major expenses intended for the insured and for their loved ones. These expenses may include funeral expenses and even outstanding debt.
- Retirement supplements
These insurance policies may also be useful to senior citizens who are going into retirement. Some policies can be converted into an annuity that will pay dividends to the holder after retirement. This will act as a great investment move for the holder of the insurance policy.
In addition to that, insurance policies also provide for insurance plans that accumulate cash value which can be used as collateral when applying for loans.
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