How Does Life Insurance Work

Life insurance is a contract between an insurance company and the life insured. You will have to pay a monthly or yearly premium to the insurance company for the life cover to remain valid. This amount has to be paid for a pre-specified number of years which is called the life term or tenure.

In case of your death, the nominee or family member has to furnish the life insurance policy to the insurance provider and submit a claim. He or she also needs to furnish the death certificate along with other documents such as identity proof apart from the insurance policy. The insurance company will then, after thoroughly investigating the claim and checking for all documents, pay-out the insurance amount claimed to the nominee.

Life insurance ensures that your family’s future is secured and there are no financial hardships. Types of life insurance covers:

• Whole life insurance
• Term life insurance
• Unit linked life insurance

If you are the primary bread earner for your family, your sudden demise can affect your family’s finances. This is when a good life insurance policy proves to be helpful. Most life insurance premiums can be paid online and the claims processes are generally simple to follow.