None of us like to think about the real reasons we need life insurance,
but could your family cope financially if the worst happened to you? Read on to find out how life insurance really works, and how important it is to get the right cover for your personal circumstances.
With life insurance, you pay a monthly or yearly premium (fee) to the provider of the cover (the insurer). If you subsequently die during the term (duration) of the policy, the sum assured (a lump sum of money, the amount of which is defined when you take the policy out) is paid out to your beneficiaries (named recipients of the payout; usually your family).
This payout can then be used by your family to pay off outstanding mortgages, bills, and other expenses which they might otherwise struggle to settle now that you’re no longer around and the family income has drastically reduced.