Life Insurance Policy: Types And Cost

Are you thinking of getting a life insurance policy? If so, you are unquestionably headed in the right direction. If something bad were to happen to you, your loved ones might suffer greatly financially. Your family stays safe from these detrimental financial effects by life insurance.

What Is Life Insurance Policy?

A life insurance policy is a type of financial plan that provides protection against financial threats connected to dying.

To put it another way, it acts as a layer of protection for beneficiaries who are left behind when the insured person passes away.

An insurance policy pays either a lump amount or on a periodic basis to the selected beneficiaries in exchange for recurring premium payments.

These monies help pay off debts, provide for the financial needs of surviving dependents, and pay for funeral costs.

Types of Life Insurance Policy

1. Term Life Assurance Policy

With term life insurance, the entire amount promised is only paid out if the life assured passes away within the allotted time. Term insurance’s comparatively low price is its primary draw. Term life insurance can be used for business continuation, debt repayment, and providing financial support to the departed’s family.

2. Whole Life Assurance Policy

The insured is covered for life by a whole life assurance insurance. It is an ongoing policy. There are two types of whole life insurance: ordinary whole life and restricted payment whole life, depending on how long the premiums payments . Whole Life can be used for paying off debts, providing for the relatives of the deceased, and maintaining corporate operations.

Tips To Assist You in Selecting Nigeria’s Finest Life Insurance Plan

1. Estimate the required amount for Life Insurance

The first step in buying a life insurance policy is figuring out how much coverage you require. Are you carrying a sizable mortgage? Do your small children rely on you for their financial support? Do you have any financial commitments that you would like your surviving spouse to handle? The present and future financial demands of your family must be taken into consideration when calculating the amount of life insurance you need.

It could be a good idea to purchase a life insurance policy that will adequately provide for the long-term needs of your family. Among these are the future home payments and the cost of schooling for your spouse and kids. Purchasing a life insurance policy that will suffice to meet your family’s immediate needs can also be a good idea. The daily living expenditures of your children and spouse are these demands.

2. Determine If You Need Permanent or Term Life Insurance

Choosing between term and permanent life insurance is the next important factor to think about when choosing the right kind of life insurance coverage.

3. Select the Proper Life Insurance Company

The last factor to take into account when selecting the finest life insurance coverage is the provider. Life insurance policies are sold by numerous companies, each of which has advantages and disadvantages of its own. Which life insurance providers are the best? Depending on the kind of policy you select, this changes.

The finest life insurance providers are typically famous for their dependability and trustworthiness. To make sure you get the best bargain available, compare life insurance providers before enrolling in a policy. Make sure the business you have selected is reliable and respectable. Additionally, you should confirm that the coverage you select is the best for your family.

4. Choose Between Guaranteed and Variable Conditions.

Choosing between a guaranteed and variable life insurance coverage is another factor to take into account. Regardless of the duration of the policy, a guaranteed coverage always pays the same sum upon the insured person’s death. A variable policy’s annual payout varies according on the performance of the business that sold the insurance.

The cost of guaranteed plans is slightly higher than that of variable policies. They are, nevertheless, typically a preferable option for people who have dependents. If you want to save money on your life insurance and do not have any dependents, variable policies are a fantastic option.

The Cost Of Life Insurance Policy

Life Savings: A minimum annual payment of ₦24,000 and no principal penalty for early withdrawal. The principal is always guaranteed, and the return on investment is index-linked. If the policyholder withdraws within the allotted two years, they may forfeit any interest owed on the insurance.
Instant Plan: This is a low-cost term life insurance policy that gives you the option to select your own premium and receive life insurance benefits, such as coverage for medical bills and permanent disability. The premium cover starts at N1,000 and goes up to a maximum of N15,000.

For that of Term and Whole Life Assurance Policy, you need to contact your insurance company for their quota.