Life insurance companies operate on one basic principle: protect a customer's family financially in the event of his or her untimely demise. The insurer must also be mindful of profitability margins, however. There is some complex math involved here, figuring out what premium to charge based on the balance of probabilities that a client will live to a certain age.

What Is Life Insurance?

Life insurance is basically an agreement between you and your insurance company that guarantees the payment of a lump-sum amount to your beneficiary when you die. In the meantime, you pay premiums according to a set timeline. Depending on the terms of your plan, your premiums may go up over time or may remain at a set amount, as detailed in your contract.

Two Types of Life Insurance

There are two basic types of life insurance: permanent life insurance, which provides lifetime coverage, and term life insurance, which provides protection for a set period. The latter is generally a more affordable alternative, but many choose a permanent plan because there will be a guaranteed payout to your beneficiary no matter how long you live. It literally covers you for your entire life.

There are also many sub-categories of life insurance that fall under one of these two umbrellas. Since there are many options, it's important to sit down with a reputable broker who can help you select the best plan for you.

How Life Insurance Companies Calculate Your Premium

How much it will cost you to have life insurance can vary greatly depending on a number of factors. Age, health status, lifestyle, and even gender can affect your rate. For example, a person in their 30's with no chronic health conditions will pay much less than a 65-year-old with heart disease. Females also tend to pay less because they have a longer life expectancy than males.

Why We Need Life Insurance

There is no shortage of heartbreaking stories about families being left in the lurch following the death of the primary wage earner. While the odds are in your favor that you will live to see retirement, having a security net in place for your dependents simply makes sense. This will help to ensure that bills can be paid and children can go to college in the event that you are no longer there to provide for them.

Trends in the Life Insurance Business

Demand for life insurance is at an all-time high, which is no surprise given the troubling times we are living in. Since the Covid-19 pandemic started, demand for life insurance has been steadily on the rise, particularly among the 45-65 age group. Companies are also investing more in these plans as part of their employee benefit offerings.

How the Industry is Responding

In response to growing customer needs, the best insurance companies are offering more customized life insurance packages and developing increasingly flexible product solutions to serve their widening customer base. There are now more options available than ever before for businesses and individuals who wish to invest in comprehensive life insurance plans.

If you would like more information on life insurance or other insurance product solutions for you or your business, contact us today at Society Insurance Network. Our expert team of brokers is here to help!

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