Nobody wants to pass away unexpectedly leaving their family members and dependents without financial support and leaving plans unfulfilled.  Unfortunately, this is not a rare occurrence, particularly among those with health problems, and those whose lives involve dangerous activities.  Life insurance is a means to alleviate some of these concerns.

The premise of life insurance is that the insured person is insured against death.  This means that in the case of their death, the insurance company to the bereaved will release an agreed-upon amount of money.  This sum of money acts as a substitute for the lost earning power of the insured party, enabling the bereaved dependents to continue life, and to pay for immediate, unplanned expenses such as funeral costs.

With the population ageing, for more and more people it makes good financial sense to invest in a life insurance policy.  Due to increased life expectancies, these days more time is spent in retirement relative to time spent in the workforce, when compared to previous generations.  Therefore, the prospect of providing extra income for the family after passing away is becoming increasingly attractive.  Look for policies that compensate for inflation, since this maintains the real value of your life insurance policy for the longest possible time.  Such policies are known as ‘inflation linked assurances’, and ensure that no matter when the insurance is called upon, a significant sum will be paid out.