Contact Us --- Life Insurance Policy with Zero commision
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1. ” Buying life insurance is like fixing a leak in your roof. The longer you wait, the more expensive it gets.”
2. ” Life insurance… It’s better to be 5 year too early that 5 minutes too late.”
3. ” Fun is like life insurance; The older you get, The more it costs.”
4. ” It’s not about what you need; It’s about what your family needs if you aren’t here.”
The life and property of an individuals are surrounded by the risks of death, disability or destruction. These risks may result in financial losses. Insurance is a prudent way to transfer such risks to an insurance company. In this articles we cover the following topics:
What is Insurance?
Insurance is a legal agreement between two parties i.e. the insurance company (insurer) and the individual (insured). In this, the insurance company promises to make good the losses of the insured on happening of the insured contingency.
The contingency is the event which causes a loss. It can be the death of the policyholder or damage/destruction of the property. It’s called a contingency because there’s an uncertainty regarding happening of the event. The insured pays a premium in return for the promise made by the insurer.
How does insurance work?
The insurer and the insured get a legal contract for the insurance, which is called the insurance policy. The insurance policy has details about the conditions and circumstances under which the insurance company will pay out the insurance amount to either the insured person or the nominees.
Insurance is a way of protecting yourself and your family from a financial loss. Generally, the premium for a big insurance cover is much lesser in terms of money paid. The insurance company takes this risk of providing a high cover for a small premium because very few insured people actually end up claiming the insurance. This is why you get insurance for a big amount at a low price.
Any individual or company can seek insurance from an insurance company, but the decision to provide insurance is at the discretion of the insurance company. The insurance company will evaluate the claim application to make a decision. Generally, insurance companies refuse to provide insurance to high-risk applicants.
What is Life Insurance?
A life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured's death.
Typically, life insurance is chosen based on the needs and goals of the owner. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage. It's important to note that death benefits from all types of life insurance are generally income tax-free.
There are many varieties of life insurance. Some of the more common types are discussed below.
Term life insurance
Term life insurance is designed to provide financial protection for a specific period of time, such as 10 or 20 years. With traditional term insurance, the premium payment amount stays the same for the coverage period you select. After that period, policies may offer continued coverage, usually at a substantially higher premium payment rate. Term life insurance is generally less expensive than permanent life insurance.
Needs it helps meet: Term life insurance proceeds can be used to replace lost potential income during working years. This can provide a safety net for your beneficiaries and can also help ensure the family's financial goals will still be met—goals like paying off a mortgage, keeping a business running, and paying for college.
It's important to note that, although term life can be used to replace lost potential income, life insurance benefits are paid at one time in a lump sum, not in regular payments like paychecks.
Universal life insurance
Universal life insurance is a type of permanent life insurance designed to provide lifetime coverage. Unlike whole life insurance, universal life insurance policies are flexible and may allow you to raise or lower your premium payment or coverage amounts throughout your lifetime. Additionally, due to its lifetime coverage, universal life typically has higher premium payments than term.
Needs it helps meet: Universal life insurance is most often used as part of a flexible estate planning strategy to help preserve wealth to be transferred to beneficiaries. Another common use is long term income replacement, where the need extends beyond working years. Some universal life insurance product designs focus on providing both death benefit coverage and building cash value while others focus on providing guaranteed death benefit coverage.
Whole life insurance
Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage. Because of the lifetime coverage period, whole life usually has higher premium payments than term life. Policy premium payments are typically fixed, and, unlike term, whole life has a cash value, which functions as a savings component and may accumulate tax-deferred over time.
Needs it helps meet: Whole life can be used as an estate planning tool to help preserve the wealth you plan to transfer to your beneficiaries.
Comparing Types of Life Insurance
How cost is determined
Insurers use rate classes, or risk-related categories, to determine your premium payments; these categories don't, however, affect the length or amount of coverage.
Your rate class is determined by a number of factors, including overall health, family medical history and your lifestyle. Tobacco use, for example, would increase risk and, therefore cause your premium payment to be higher than that of someone who doesn't use tobacco.
Health insurance
Health insurance is bought to cover medical costs for expensive treatments. Different types of health insurance policies cover an array of diseases and ailments. You can buy a generic health insurance policy as well as policies for specific diseases. The premium paid towards a health insurance policy usually covers treatment, hospitalization and medication costs.
Education Insurance
The child education insurance is akin to a life insurance policy which has been specially designed as a saving tool. An education insurance can be a great way to provide a lump sum amount of money when your child reaches the age for higher education and gains entry into college (18 years and above). This fund can then be used to pay for your child’s higher education expenses. Under this insurance, the child is the life assured or the recipient of the funds, while the parent/legal guardian is the owner of the policy.
You can estimate the amount of money that will go into funding your children’s higher education using Education Planning Calculator.
Travel insurance
Travel insurance is a type of insurance that covers the costs and losses associated with traveling. It is useful protection for those traveling domestically or abroad.
Breaking Down Travel Insurance
Many companies selling tickets or travel packages, give consumers the option to purchase travel insurance, also known as travelers insurance. Some travel policies cover damage to personal property, rented equipment, such as rental cars, or even the cost of paying a ransom. Frequently sold as a package, travel insurance may include several types of coverage. The main categories of travel insurance include trip cancellation or interruption coverage, baggage and personal effects coverage, medical expense coverage, and accidental death or flight accident coverage.
Coverage often includes 24/7 emergency services, such as replacing lost passports, cash wire assistance, and re-booking canceled flights. Also, some travel insurance policies may duplicate existing coverage from other providers or give protection for costs that are refundable by other means.
4. What are the tax benefits on insurance?
In generally government has given the facilitation of tax in insurance premium. It is define in Budget speech ever Fiscal year in Nepal.
Non-Life Insurance
Non-Life Insurance is a policy that provides compensation for losses incurred from a specific financial event. This type of policy is also known as general insurance, or property and casualty insurance. Examples of non-life insurance policies include automobile policies, home-owners policies, damage cover from fire, marine accidents, travel, theft and any catastrophe etc. Since the probability of occurrence of these risks is very difficult to ascertain, it thereby is an extremely difficult task to measure the amount of damage they would do, on their incidence.
Types of general insurance ( Non Life Insurance)
General insurance can be categorised in to following:
- Motor Insurance: Motor Insurance can be divided into two groups, two and four wheeled Vehicle insurance.
- Health insurance: Common types of health insurance includes: individual health insurance, family floater health insurance, comprehensive health insurance and critical illness insurance.
- Travel insurance: Travel insurance can be broadly grouped into: individual travel policy, family travel policy, student travel insurance, and senior citizen health insurance.
- Home insurance: Home insurance protects a house and its contents.
- Marine Insurance: Marine cargo insurance covers goods, freight, cargo, and other interests against loss or damage during transit by rail, road, sea and/or air.
- Commercial Insurance: Commercial insurance encompasses solutions for all sectors of the industry arising out of business operations.
- Accident Insurance :Accidents of different types are possible at any time ,at any place and in case of any person or object .Persons and vehicles are more prone to accidents causing injuries and damages.
- Fire Insurance :In order to get the asset ,stock or machines insured against fire ,a proposal form is to be filled in and submitted to the insurance company .The Insurance company examines the proposal with due regards to various factors and the periodical amount of premium is fixed.a insurance policy is then issued in favour of the applicant
- Theft Insurance
- Property Insurance
- Aviation insurance
- Livestock insurance
- Crop insurance
