Life Insurance is an insurance policy that provides an agreed amount of cover over an agreed term, so that should you die during
policy term, a lump sum is paid out. Life insurance is considered as cornerstone of financial planning. It is a cost effective way to provide for your family after you are gone. Many of us will at some stage in our lives have need for life insurance. Life insurance is an agreement between you and an insurer and under terms of a life insurance contract, insurer promises to pay a certain sum to a designated beneficiary when you die, in exchange for your premium payments. This may give you peace of mind that, should you die during policy term, your family would have some financial security.
The most common reason for buying life insurance is to replace income lost when you die. For example, say that you work, and that your income is used to support yourself and your family. When you die and your income stops life insurance proceeds can be used to continue to support family members you've left behind.
If you have dependants or your income is needed to maintain your family's standard of living you may need life insurance. If you died your family could use money to pay off some outstanding bills or perhaps towards a mortgage. There may also be extra costs to deal with that were not there before; such as cost of extra childcare. To decide if you need life insurance you will need to consider whether your family could cope financially without you and for how long.
