Do you really need life insurance?

From various policies to terms such as medical underwriting, life insurance is something people do not fully understand until someone takes them through the journey of buying a policy. However, the essence and whole purpose of life insurance is not to enrich the beneficiaries, but rather to maintain their economic status as if the benefactor is still alive.

When making the decision to take up a life cover, you are deciding whether to transfer financial risk that will arise upon the death of the insured, to the insurance company. This means that for a sum of money paid monthly called a ‘premium’, the insurer agrees to take up the financial risk associated with one’s death. People often take up life cover for a myriad of reasons, commonly to protect their liabilities at banks - mortgages, car loans, personal loans and even to leave behind a financial legacy.