Source: icnj.com
Life insurance is one of the achievements of civilization that brings us protection in the event of various unforeseen events. It is a contract between you and the insurance company. These contracts can be very different. All parts of insurance can vary according to your wishes and what the insurance company offers.
That is why when you open website of an insurance company, you will find so many different types, that for most you will probably not know what exactly they cover. One of the types you will encounter most often is basic life insurance. And that is the type of insurance you often come across because it’s something an employer can offer as part of the benefits to its employee. What does basic life insurance cover, as well as all other information about this type, you will find out if you continue reading this article.
What is basic life insurance?
According to Beamalife What makes basic life insurance primarily different from life insurance is that it is a type of group insurance. Employers provide this benefit at a very low cost or free of charge for their employees. The insurance policy is usually based on the employee’s salary. If the contract is such that the employee still pays a certain amount through salary deduction, it is very affordable and it won’t be any kind of financial burden for employer.
This is a low-cost option because it applies to the whole group, not the individual. The risk of the entire group, and only one person, is taken into consideration and then it is a favorable option for a company that offers insurance. What makes it even more different is that you don’t usually need to have a medical record or any other criteria that qualify you for insurance, as is often the case with other types.
Who is eligible?
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In terms of eligibility, you must work at least 20 hours a week, and 40 hours if you want insurance to cover your family as well. Also, there are certain age limits, and this is usually 65 years of age. If for some reason you work less than 20 hours a week or 40, then the policy will be suspended until the working hours return to the number agreed in the contract.
However, if you do not want your license to be suspended, there is a possibility that you will continue to pay a certain amount of money during your absence from work or some other reason that affects you to have less than 20 working hours per week. And an option that is also often chosen by people who have lost their jobs is to change the type of policy. Then they change the policy from group to individual. It is not complicated process and you won’t have to pay fees because you are changing type of policy. But you will have to start paying for policy itself because terms are changing. Learn more about eligibility and changing of policy at swiss-hf.ch.
Types
There are two basic types of life insurance. The first type is the so-called term life insurance and it is the most common type of policy you will get when your employer is the one who sponsors the policy. This means that the policy will be valid for as long as you work for that employer. This means that everything stated in the contract will be covered, but only for the duration of the employment contract with the company. Once you quit or you are fired, policy is no longer valid.
The second type is whole life insurance and as the name suggests that type will last as long as you alive. It is a more expensive option and it is not logical for an employer to choose to sponsor this type of policy because it would create a life-long obligation to pay it for you, even though you may not have worked for it for decades. In today’s world almost no one works whole life for same company. There are certain retirement plans that can include this, but it is something that must be negotiated with the employer. In most other cases you will receive term life insurance.
What does it cover?
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What exactly covers depends on the company and on what is included in the policy. Death benefit is something that is almost always covered by this type of insurance and it involves paying money to the family, after the death of the insured. Cash value refers to the part of the money which are paid for you policy is moved to the so-called investment account. And the moment you cancel the policy, the cash from that account will be paid to you if it is not spent on investments. Of course, many other things can be included, for example, paying the funeral or treatment of critical conditions and the like.
However, since it is basic one, you need to know that these amounts are significantly less compared to individual life insurance. Should you require a great alternative, medicare supplement plans are a great choice, especially those offered at Medisupps.com.
Advantages
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Some of the biggest benefits of basic life insurance are that you pay almost nothing. Although the policy insures you for smaller amounts, you are definitely insured without any burden for your budget. Also, you are eligible for this type, although for example you are not eligible for private or some other type of life insurance. These other types often require you to attach medical records before signing a contract and the like, and if you have health problems your application for a policy may be denied.
Another benefit you will have is related to taxes. If you are covered by an employee-sponsored policy, only if it covers over $ 50,000 will you pay taxes. And for smaller amounts you are exempt from taxes.
Conclusion
Although the amounts covered are generally modest compared to other types of insurance, basic life insurance is a very good option and something to accept if your employer offers it to you as one of the benefits. It is a particularly good option if you do not want to give a lot of money, if you are not eligible for some reason and to boost total life insurance.
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