There are two major types of insurance. The life and non-life insurance. The life insurance, protects the family of the person in case something happens to him. When a person who is insured dies, the money that he insured will be given to the beneficiary that he has chosen.
The non-life insurance is an insurance that protects items or properties. Under this category, there are several different types. There are car insurances, which protect cars in case of accidents; property insurance, which protects properties and houses from fire and other forms of damage; deposit insurance, is what banks have in order to protect their customers from losing their money in case the bank suffers financial setbacks; health insurance, which helps in covering for medical and hospital costs. Among the various non-life insurance, the most popular is the health and car insurance.
Some insurance also provide for the future like retirement plans and death plans, which covers for burial costs.
What is the difference between a premium and a face amount? Premium refers to the amount that you have to pay every year for the insurance. Some insurance companies also offer to divide the premium into monthly installments to help their clients. The face amount on the other hand is the amount that you have insured yourself into.
What do you mean by double indemnity?
Some insurance policy offer an accidental clause that would double the face amount in case death has been established as accidental. This is done to protect the insured抯 family in case of an untimely death. Double indemnity means that the face amount will be doubled when death is accidental.
Is the beneficiary always the legal spouse?
No. Contrary to popular opinion, it is not always the spouse who is the beneficiary. It is up to the person to choose, who he names as beneficiary. It can be any member of the family as long as insurable interest is established. If in case, the children are named beneficiaries and are still not in legal ages, a guardian will be named to assume control of the money for them.