To Evolution

What are the benefits of life insurance?

    Shiimaa Mohamed
    By Shiimaa Mohamed

    Categories: Insurance


    0/5 stars (0 votes)

    What are the benefits of life insurance?

    Some life insurance companies provide some kind of documentation to cover the life of the family member against the risk of death. The most prominent of these documents are the Egypt-Millennium document, which allows young people to participate in insurance and benefit from the provision of insurance protection for their families in case of death.

    The documents also allow for the creation of savings for them in the future that help young people in the marriage of children in reduced installments during the first five years of insurance and to suit the conditions of young people.

    The advantages of the document in case of survival until the end of the term of insurance:

    - Payment of guaranteed annual profits.

    - Payment of additional profits from surplus profits realized by the life insurance company.

    In the case of the death of the insurance agent during the insurance period,

    - Payment of the amount of insurance in full immediately after death.

    - Payment of guaranteed annual profits for each full insurance year in addition to the additional profits from surplus profits achieved by the company until the date of death.

    - Payment of an additional insurance amount on the due date, equal to the original insurance amount.

    What are the advantages and disadvantages of life insurance?

    - Life insurance contract is intended to protect family income after the death of the main breadwinner

    - There is no maximum limit to the value of life insurance

    - There are documents for a specific period to be recovered after the expiry of the value of the document and the proceeds of its share of the profits achieved by the insurance company

    - Borrowing can be borrowed from the insurance company or from the bank.

    One of the advantages of life insurance is that it lasts for a lifetime and does not end on a certain date except on the date of death. In this respect, the insured does not need to worry because this insurance lasts for a lifetime and his heirs benefit from it.

    - It is characterized by large flexibility as it can be converted to any other type of insurance and the same amount.

    - Premiums are equal throughout the insurance period.

    Defects

    - that the insured does not benefit from him in his life, but benefit from the heir after his death.

    - The insurance premiums continue for a long period ie to the end of the term of the document, that is, until the death of the insured, which burdens the insured.

    The importance of insurance and its benefits to individuals and society

    Insurance has many benefits, both for individuals and the community in general, including:

    1- To achieve the principle of cooperation among a group of individuals exposed to the same danger and to secure their future by sharing the risks they may be exposed to.

    2 - Insurance helps in maintaining the wealth of the establishment by compensating for the losses that may be exposed to the risk

    3 - Insurance helps to maintain the productive capacity of the establishment.

    4 - provides reassurance in the minds of individuals.

    5 - Avoiding a large potential loss that may lead to the loss of life of the individual and the elimination of his future if it occurred and has no insurance against the danger.

    6- Insurance provides protection and safety for individuals and companies alike through the study of risk factors and the development of appropriate solutions and procedures to address each type of risk.

    7 - Insurance helps to save, which is the premiums collected by insurance companies, which help the family of the individual after his death when life insurance, for example.

    8 - Insurance provides a great benefit to the national economy through the insurance companies to invest premiums collected in public and private projects, through loans provided to companies or individuals, which contribute to the economic development of the country.

    9 - Easy to insure the access of individuals to loans from banks, because most banks reluctant to grant loans to individuals for fear of non-payment at the time of death, but when banks know that individuals who wish to obtain a loan have a life insurance, they do not hesitate to give them Loans, because they will be able to meet the loan amount from the insurance company at the death of the borrower.

    Insurance benefits

    • Planning and ensuring for the future
    • hard currency
    • has many benefits in investment and investment promotion and protection of capital
    • Facilitating bank loans If a businessman asks for a loan from the bank, the bank will make a temporary life insurance policy for the duration of the loan. If the borrower dies, the insurance company pays the remaining amount of the loan to the bank and the rest to his heirs. Imagine if the bank did not do this. Insurance ??).
    • Combating poverty.
    • Manpower operation.

    Insurance and Investment

    It is not fair to compare performance and return on insurance with the performance and return of other investment branches without taking into consideration the essence of the insurance process.

    1. Insurance is necessary and vital to protect your family from the risks that your life may suffer.
    2. When you buy an insurance policy for your car, fortunately you have not suffered any losses, will you get any advantages? But at the same time invested a premium document to protect your valuable vehicle.
    3. People usually talk about the return on investments and tend to compare these returns with those obtained by insurance policies.

    Why should you believe in your life?

    • When planning your life you should consider your family's needs such as medical expenses, home rental, marriage and education expenses.
    • Throughout our lives, we are exposed to various risks such as poor health, financial distress, accidents, and therefore insurance will help protect you from the damage or loss that can result from it by transferring the impact of these risks to the insurance company.

    What do life insurance / medical treatment offer you?

    • Your purchase of a life insurance policy means that you have a contract with your entitlement to the amount of insurance in the event of death "God forbid" or when the term of the insurance expires (depending on the type of document).
    • In the case of the death of the "Insured" the insured person, his heirs shall be entitled to compensation equal to the full amount of insured insurance.
    • In the event of an accident of an insured person or injury to a disease which may lead to his inability to restore his normal life again (inability to work) will compensate the insured to pay the amount of insurance.

    When should you buy a life insurance policy?

    When you have a family, young children, and you are the sole breadwinner of your family (the wife does not work) then insurance becomes necessary and vital.

    If the wife dies (which does not work), then the expenses of raising the children will increase, and all this supports the opinion of the need to insure the life of both husband and wife.

    When you are young and healthy you can insure your life at a lower cost when you are older and your health is not good, and you have to think about what will happen when you retire? Will you own the same income before retirement? Life insurance will help you maintain the same level of income after retirement.

    How do you determine the value of life insurance you need?

    Step 1: Define your expenses

    Try to estimate your family's annual budget. It should include your basic living expenses, childcare expenses, mortgage payments, and education expenses (private schools).

    Step 2: Evaluate the assets you own

    Try to estimate the value of the assets you invest or save, or other sources of income, such as your annual salary.

    Step 3: Determine what you can save

    From the previous steps, select a certain amount you can provide to buy a security document and specify whether you can pay this amount monthly, quarterly or annually.

    Step 4: Identify your insurance needs

    Determine what kind of insurance you need, do you need a death risk coverage only? Or do you want the insurance policy to include a savings component besides death coverage? What is the insurance period you want?

    Step 5: Meet your needs as provided by insurance companies

    Choose the document that best suits your finances (Step 6).

    What types of documents do life insurance providers offer?

    Individual insurance

    The Jordanian market has many individual insurance policies according to the coverage that meets the needs of the vast majority of insurance customers,

    - Temporary insurance (covers the risk of death only and is called consumer insurance)

    Is the simplest types of insurances life:

    1. This insurance is temporary for a specified period of time 5,10,15,20,25.
    2. This insurance has no monetary value: it is protection only and has no recoverable value.
    3. Covers for death for any reason.
    4. This insurance cost is very simple and very high protection.
    5. Insurance coverage in case of survival until the end of the term of insurance (which means that if you survive after the end of the insurance will do another document and will be lost all amounts that the insured to pay so called temporary).

    What are the types of general insurance documents?

    General insurance, other insurance other than life insurance, except medical insurance and short-term personal accident insurance, are considered general insurance, although they are for persons. Short term insurance is intended for a period not exceeding one year which can be renewed according to the client's agreement Insurance company. General insurance also includes insurance for tangible property and civil responsibilities and the most important documents are as follows:

    1. Insurance against fire hazards, additional risks and burglary.
    2. Insurance against various risks and medical treatment.
    3. Civil Liability Insurance.
    4. Engineering Insurances.
    5. Petroleum Insurance.
    6. Car Insurance.
    7. Transport insurance.
    8. Ship and aviation body insurance.
    9. Other specialized covers.