When we are young we often wonder at the necessity of life insurance. Maybe we feel that we can live forever, that we are invincible, or maybe it is just that youth are less financially responsible than adults. One way or the other, as we grow older, life insurance becomes a much more important thing to consider.
Not having life insurance can mean a lot of trouble financially for you and for your family.
Basically, life insurance is just what it sounds like. You, the insured, take a policy out with an insurer, and, in the event of your death, that policy goes to some named benefactor.
Certain factors go in to determine what kind of a life insurance policy you are eligible for. These factors are usually age, gender, and whether or not you smoke. Beyond that, the insurer has the right to contact your physician in order to find out medical history information about you. This is so that they can adequately determine whether or not to insure your life, and beyond that what kind of premiums you should be paying.
The premium that you pay may change as you get older. In fact, most insurance companies use the same index to determine the average rate of death within certain groups. So if you are a gun owner, drive a fast car, or have a history of medical illness, you will fall under a higher risk of death than someone without those characteristics.
Many life insurance policies have suicide clauses, so that if the insured takes their own life within the first two years of the policy, then the insurer does not have to pay out on that claim.
Also, if there is something that seems incongruous about the insured's death, then the insurer has the right to investigate the death until it is satisfied that the conditions have been met that warrant a payout.
For many, insuring our lives is a step which can make us all feel more secure that even after we die our families will be well taken care of. In a situation where the insured is the only wage earner, this is especially true, as the insurance claim can act as a replacement for his or her income.