What is Life Insurance?
What is Life Insurance? Life insurance is the insurance taken out to avoid suffering in the event of the insured’s death or permanent and critical illnesses. This insurance ensures that the person and his family receive coverage in accordance with the conditions specified in the contract in case of illness, disability and death events specified in the contract. In this way, living standards can be better with the effect of insurance. Life insurance is a type of insurance that is valid worldwide.
Why Should You Have Life Insurance?
People should take out life insurance for themselves because it provides financial security to the person and family in case of adverse events. In the event that the person insured dies, the family behind him receives money from the insurance in the amount specified in the insurance contract, and in this way, they can continue their lives. With the money they get, they can cover their education expenses. In case the insured person becomes disabled in cases such as accident or illness, the insurance pays the person and his family in the determined amount. In this way, both the person and his family can continue their lives with better standards after the accident.
With life insurance, if the person has an accident, treatment costs are covered with low premiums and thus the burden of treatment is eliminated. Likewise, in case the person has a dangerous disease, it provides financial support in order to pay the insurance treatment costs. In addition, thanks to the premiums paid, tax advantages can also be used. Apart from these, depending on the preferred insurance company, the right to benefit from the opportunities and advantages offered can be obtained.
Who Should Have Life Insurance?
The conditions for benefiting from life insurance may vary depending on the insurance companies and the insurance types preferred by the individuals. However, the age requirement for life insurance is generally between 18 and 65 years old. Those who are in this age range and want to gain coverage against risks can insure both themselves and their families by taking out insurance.
What are the Types of Life Insurance?
Life insurances are divided into risk-weighted life insurances and cumulative life insurances. Cumulative life insurances are life insurances that help people to save. Cumulative life insurances are limited to at least 10 years. When people who have this insurance want to benefit from the insurance against loss of life, the determined amount is paid to their families after the death of the person.
In the event of disability, the determined amount is paid to the person in the same way. In the event that death, illness and accident events do not occur within a 10-year period, a lump sum payment is made to individuals depending on the premiums paid. The validity period in risk-based life insurances is one year.
In the event that the insured dies within this one year, the compensation is paid to the person’s family or to the person specified in the policy. In addition, if it is specified as coverage in the insurance policy, compensation can also be paid for the occurrence of disability as a result of accident or illness.
What are the Coverages of Life Insurance?
The main coverage determined in life insurances is usually death cover. However, depending on the preferred type of insurance and the insurance company, it is possible to benefit from additional coverage.
These guarantees include;
- Complete disability due to illness
- Death from accident
- Complete disability due to accident
- Dangerous diseases
- Accumulation guarantees
- Accident treatment expenses coverage
- Death as a result of an accident in public transport
- Temporary incapacity coverage due to accident
- Coverage for accidental daily hospital expenses
In order to benefit from these coverage, it should be stated in the insurance policy which coverage is included in life insurance. Otherwise, the right to benefit from the guarantees cannot be used.
In Which Situations Does Life Insurance Pay?
There are situations where the insurance company does not pay to life insurance holders or their families. In case of death while in the air except as a passenger, the insurance pays only the default reserve. Living allowance is not paid in this case. If the person who has the right to benefit from the insurance of the insurance holder kills the insured person, it will not be possible to receive payment. Payment by the company is made to other members of the family.
In the event of death due to AIDS, nuclear attack and sabotage, the insurance pays only mathematical provisions. If the contrary is specified in the insurance policy, it is possible to pay the life compensation. In the event that the insurer dies due to suicide, the insurance has an obligation to pay prudence. Apart from this, it does not pay the coverage, but if the insurance has paid 3 years or more premiums, it must also pay the coverage.
What Should Be Considered When Taking Out Life Insurance?
Those who want to ensure the future of themselves and their families should be careful before taking out life insurance and choose the type of insurance suitable for their situation. Thus, they can gain the right of coverage in case of accident, death and disability.
Things to consider when taking out life insurance are as follows;
- They should choose the type of insurance appropriate for their profession, marital status, illness and lifestyle.
- It is important for both the family and themselves that people working in risky professions choose life insurance that covers these risks.
- Before signing the insurance policy, they must read their obligations and the coverage rights they can use in case of accident or death. Otherwise, they may encounter situations such as not being able to benefit from the right or paying additional premium.
- The out-of-scope situations of the insurance should be carefully examined.
- During the insurance contract, people must give correct answers to the questions. Incorrect answers may result in the cancellation of the contract and insurance.
By paying attention to these articles, people should choose the insurance type that best suits them and sign the policy. In this way, they gain assurance and can benefit from these assurances in case of accidents, illnesses and death as long as the insurance is valid.
Is There a Tax Advantage in Life Insurance?
There is a tax advantage in life insurance. In cumulative life insurances, it is possible for the insurance holder to deduct half of the premiums paid for himself, his child and his spouse from the income tax base. In risky life insurances, it is possible to deduct 15% of the premiums from tax if the payments are over.
What Happens When Life Insurance Premiums Are Not Paid?
People who have life insurance must pay their premiums on time. If the premium payments are not paid on time, the insurance will be terminated. If the premium is not paid on maturity for one year or less insurance, the default occurs upon the expiry of the term, and if the payment is not made within 15 days, the insurance coverage is suspended.
If he does not pay premiums for 15 days after the insurance coverage stops, the insurance will be terminated. If people who have a life insurance for more than one year do not pay their premiums, the insurer sends a letter to the insurer stating that the installment must be paid within 30 days. If payment is not made within 30 days, the insurance will be terminated.