For example, Mr. When he was 25 years old, Adam took an endowment life insurance for 35 years. If Mr. Adam is fortunate to have attained the age of 60 years (ie 25 + 35), the insurance company will be the policy-holder (ie whoever is paying the premium, Mr. Adam, if he pays the premium) then the sum assured Will pay However, if Mr.
Adam dies at the age of 59 before completing the 35-year time limit, his insurance amount will be paid to his beneficiary (ie policy-holder). In case of death, the sum assured is paid at the age of Rs. Adam dies. Talk about the purpose of life insurance. Once we achieve the proper purpose of insurance for a science, everything else will fall into place. Life insurance has the same purpose as any other type of insurance. It is “insurance against loss”. Car insurance is to insure your car or someone else’s car in case of an accident. So in other words, since you probably cannot pay the loss yourself, insurance is applicable.
Home owners insurance is to insure against the loss of your home or items. So since you probably can’t pay for a new home, you buy an insurance policy to cover it. Instead of making this complicated, I will give very simple details on how and what goes down in an insurance policy. As a matter of fact, it will become simpler as we would otherwise be here all day. This is an example. Suppose you are 31 years old. A typical term insurance policy for 20 years would be $ 20 / month for $ 200,000. Now … if you want to buy a whole life insurance policy for $ 200,000 then you can pay $ 100 / month for it. So instead of charging you $ 20 (which is the correct cost) you will be overcharged with $ 80, which will then be put into a savings account.
We should stick to the previous depiction. We say that one thousand 31-year-olds (all in good health) bought the above term policy (20 years, $ 200,000 dollars $ 20 / month). If these people were paying $ 20 / month, then it is $ 240 per year. If you take it and extend it over a 20-year term you will have $ 4800. So each person will pay $ 4800 over the term life.