What is Life Insurance?
Life insurance is a contract between a policy holder and an insurance company (insurer), where the insurer promises to pay a designated beneficiary a sum of money (benefits) upon the death of the life insured or a maturity benefit to the policy owner should the life insured survive the full term of the policy cover. Depending on the contract, other events that occur like terminal illness or critical illness of the life insured may also trigger payments. The policy holder typically pays premiums either periodically or in a lump sum. The policy owner is often the life insured. However, you are allowed to have a policy owner with a different life insured, for example a parent, spouse or child, as long as they qualify for insurance cover.
The primary purpose of life insurance is to provide a safety net in the event of untimely loss. The payouts from insurance plans enable families to have continued financial security when the loss of a loved one occurs.
Insurance products also have a savings/investment component that provides periodic returns plus maturity payouts at the end of the policy term to complement the death benefit cover. They also attract annual declared bonuses. Life insurance can therefore assist with retirement planning, mortgage protection, keyman cover, payment of tertiary fees or personal needs like children’s birthdays and weddings. The periodic returns cover a wide range of business and personal financial needs. Life insurance plans are the only financial products available in Fiji that combine savings with payouts for untimely loss.
Questions & Answers on Life Insurance
Who needs Life Insurance?
The answer is quite simple, if someone will suffer financially when you die, chances are you need life insurance. Life insurance provides cash to your nominated beneficiary after your death. This cash (known as the death benefit) can replace your income and can assist your family meet important financial needs like funeral costs, daily living expenses and tertiary education funding.
So, everyone needs Life Insurance.
How can life insurance be used by business owners?
Life insurance can assist to protect you and your business. If one of your directors or a key employee passes on prematurely, life insurance can help. With Keyman Insurance, the benefits or proceeds are payable to the company and provides the owners with the financial flexibility needed to either take care of the financial needs of the key employee’s family, hire a replacement or further invest in the business.
How can my family use life insurance?
Parents with children have added responsibilities. Most families today, depend on two incomes to make ends meet. Ask yourself, “if my spouse survived me, could my family maintain our current standard of living on one income?” Or for single bread winner families, “how would my family survive should the bread winner pass on?” Life insurance can assist protect the living standards of your family on the untimely death of a breadwinner.
How can life insurance assist a single parent?
If you are a single parent, then you are the caregiver, breadwinner, cook, chauffer and so much more to your children. With so much responsibility resting on your shoulders, you’ll need to safeguard your child’s financial security if you pass on. Life insurance can provide that security.
I’m a “stay at home” parent? How can life insurance assist me?
Just because you’re a stay at home parent, this doesn’t mean that you don’t make a financial contribution to your family. Cooking, cleaning, and other household activities are all important tasks that, for which the replacement value is taken for granted. With life insurance, the value of your life and contributions safeguarded, ensuring protection for your loved ones, should you meet an untimely death.