Life insurance

Life insurance provides someone with some financial aid in case of certain unplanned event and Mauritians should give it more thought. As life is full of surprises, you never know when something unwanted may happen and so you want to be prepared just in case as a means to have a way out. The insurance policy is made by an insurer in the form of a contract where certain agreements are made by the company and the person to be insured; though policies vary widely from company to company, the terms of the contract are generally the same like a certain premium to be paid at the beginning, monthly/yearly installments, money to be paid out by the insurer over certain conditions etc.

Life insurance is one of the many insurances that covers the insured person in case of death where whoever is under the contract (who he wants to be covered) gets some capital. This type of policy is very interesting for families where the dependents/spouse will be taken care of financially in the eventual death of the house money earner and thus assures peace of mind to the insured in case of his/her demise. While certain agencies may pay out in regular installments, others may pay out a lump sum in one go; also, certain exclusions are important to note where the company may not pay out like suicide, death in a riot, war etc.

Important terms to be defined in this type of insurance are: the insurer, that is the company from which the policy is bought; the owner of the policy is the person who actually pays for the policy and the insured is the person who is being guaranteed to get compensation (the policy owner can be both the owner and the insured too). The owner chooses the beneficiary of the policy though that person may not be actively involved in the policy at any time; the beneficiary can be changed if the person wishes so, but it depends on the contract being made and the terms of the agency. Life insurance is based on the policy of insurable interest where the owner of the policy is essential to the lives of his/her dependents (spouse to spouse relationships; father to children; sister to brother); the relationship must be a close one where the eventual death of the owner would cause the insured emotional and financial loss (can also include financial partners). This clause thus exempts third parties from reclaiming money from insurance companies and reduces the risks of crimes for financial benefits.

Policies can include term assurance where the company pays out in the eventual death of the owner over a specific time period, protection insurance where a person may be reimbursed by the company in case he is unable to work due to some accident or sickness (can be up to 75% of the usual paycheck), trauma assurance where the person gets paid in case he/she is diagnosed for certain diseases as per the agency (cancer, kidney failure etc), disability cover in case the person becomes permanently disabled and thus the company pays out the sum insured.

Advantages of a life insurance are that it can cover a family over eventual death of a person, cater for disability or critical illness (depending on the companies), can offer monthly lifelong pensions, can constitute a way of saving money and payment can be made as per the owner’s capacity (monthly/yearly; amount to be paid, currency like pounds, Euros etc). The contract is made based on the owner’s choices but exclusions like what is not being covered should always be made clear prior to signing and accepting the legal agreements.

Life insurance can be broadly defined as coverage of the insured person where his/her death would bring someone specified in a contract a sum of money; it can also include other benefits like pension scheme, disability coverage, trauma assurance etc.