Life Insurance: What, Why, When? What is Life Insurance? • Life Insurance is a way how the main breadwinner in a family protects the future of family members or other persons who may not have enough money to live on if the breadwinner dies. • Usually people buy Life Insurance to protect their children, their wife/husband, a disabled relative or elderly parents. • A sum of money called death benefit is paid by the insurance company to the individuals chosen by the person who takes out the Life Insurance when this person dies. What is the main benefit of Life Insurance? • The Life Insurance makes sure that the family members will be able to afford and maintain their lifestyle, or receive the care they had before the death of the person who takes out the Life Insurance. Think and discuss… 0000 0 Fatal situations that might occur in life 0 o Why should one buy a Life Insurance? So that in the case the family breadwinner dies, the insurance will provide immediate money: • To pay for a funeral and any other costs • To pay off loans • To use child or elderly care services so that the surviving husband/wife can go back to work • To allow the surviving husband/wife to stay at home and not work for a while. Where do you go to buy a Life Insurance? • Insurance companies • Banks • On the internet Steps to take when applying for Life Insurance • You must fill out an application form. • You may be asked to take a medical exam. How do you pay for the Life Insurance? • When your application is accepted you will be sent a Life Insurance Policy (a document with all the details which you must keep safe). • You will also start to pay a small amount of money every month. • This money is called the premium and it is paid by the person who buys the insurance to the insurance company. • This money is ‘saved’ by the insurance company. What is the death benefit? • If the person who buys the Life Insurance Policy dies, the family members or other persons mentioned in the policy receive a death benefit. • This money will help them meet their different expenses and other financial needs. (e.g. pay car or home lean, pay school fees, pay for child care or elderly care etc.).
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