Life Insurance

In the case of an untimely death, a life insurance policy will offer your dependents financial security for a predetermined amount of time (the policy term). The level of financial protection is referred to as sum assured or cover; in the case of an untimely death within the policy term, sum assured is the amount your dependents will get.

Your family's needs and your income will determine this. For a long time, or at least until your dependents become financially independent themselves—for example, when your children begin working—the money from your life insurance policy should be sufficient to support their needs. Furthermore, in the event of your untimely death, your coverage should be sufficient to pay back any debt you may have, such as home or personal loans. Your life insurance amount assured (cover) should, as a general rule, be at least 10–12 times your yearly salary.

The premium is the price of an insurance policy. As stated in the policy document, the insurance premium is paid annually (or at other intervals, such as monthly, quarterly, etc.) for the duration of the policy or for a shorter period of time. Additionally, there exist policies with a single payment, in which the whole premium is paid in advance. The insurer will give you a premium discount because the full amount is paid in one lump sum. The sum assured, your age, any pre-existing medical conditions (such as diabetes, hypertension, etc.), lifestyle choices (such as smoking), and additional riders (such as an accident or serious sickness) are the most significant elements that will affect your insurance price.