Thanks to all those commercials we grow up watching on TV, we are no stranger to the term ‘life insurance’. However, what does ‘life insurance’ mean?
What is Life Insurance?
Life insurance acts as a form of financial protection for the beneficiary of the insured person. It is an agreement, done between the life insurance company and the insurance policyholder.
As per the agreement, the policyholder has to pay premiums according to a set schedule. In case of death, the authorized beneficiary receives a particular amount of money. This can be in the form of income, received on a monthly basis or lump sum one time only.
How Many Types of Insurances Are There?
Before you start paying your premiums, it is better to apprise yourself of the different insurance types.
There are four common types of insurance policies, which everyone should have:
1. Life Insurance
If you have a family that may suffer in case of your demise, you should opt to get life insurance and designate some beneficiary (s). Your funeral and burial expenses will be covered and your family will have a secured financial future.
2. Car Insurance
Motor vehicle accidents are inevitable and can occur with anyone. Not only do you have to protect your vehicle, but yourself as well in case you sustain injuries during the accident. You can also get compensation for your medical expenses.
3. Disability Insurance
Disability insurance is essential in case you are subject to any kind of disability in life, because of some injury sustained at work. With disability insurance, you can receive up to 75% of your monthly salary as well.
4. Health Insurance
In a time when healthcare costs are skyrocketing, Health insurance can help manage any unforeseeable medical expenses. You will choose your premium plan, depending on your medical visits.
Some Important Statistics Regarding Insurance
- There are 580 stock life insurance companies, and 773 life insurance companies in the US.
- There are around 109 life insurance companies in the US.
- The average face amount value individual life insurance policies is around 168,000 USD.
- Around 266.89 million life insurance policies are currently in force in the US.
- Most people in the US prefer buying life insurance policies ‘in person’.
- Around 52% of Americans think life insurance is too expensive, and do not have it.
- 55% of Americans have visited a life insurance company’s website at least once.
- ‘Income replacement’ is the biggest reason for owning life insurance in the US.
- AIA Group – a Hong Kong-based group is the largest life and health insurer globally.
- US is the largest insurance premium writing country in the world. Japan ranks second and China ranks third.
- 53 billion USD have been invested in processing insurance claims in 2020.
- 80% of customers will prefer digital channels for transactions.
- Taiwan has the highest proportion of insurance to GDP in the world.
- Women usually pay 30% less for life insurance, owing to lesser risks.