Life Insurance Policy: Costs and Benefits

Paper Info
Page count 2
Word count 585
Read time 3 min
Topic Health
Type Critical Writing
Language 🇺🇸 US

Life insurance plays an important role in the lives of the majority in society because life is full of uncertainties. An individual has no guarantee that he or she would live to maturity without facing challenges associated with diseases and accidents, which can perhaps bring about incapacitation and long-lasting illnesses. With life insurance, an individual does not have to worry over the loved ones left behind upon the occurrence of death or any event that can make an individual fail to provide for the family. Life insurance ensures that the loved ones enjoy their usual lives, irrespective of the uncertainty. Many families have been forced to depend upon government-funded programs for medical services, as well as well-wishers upon the demise of the breadwinners. Therefore, life insurance is an opportunity to plan and ensure that an individual does not rush to apply for a loan to cater for the urgent health needs. The second benefit of health insurance entails reducing the costs of the soaring health services. The health policies offered tend to protect individuals from huge hospital bills because they allow cost sharing. In the modern societies, emergence of lifestyle diseases present real financial challenges to individuals hence the existence of life insurance covers offer a solution (Popow, 74).

Even though insurance policies have several benefits, they have a number of disadvantages, as they are associated with certain costs that might be difficult for an individual to meet. First, those holding insurance policies might face constraints as far as payment of premiums is concerned. Studies show that an individual might engage in hard work only to purchase a life insurance for others without benefiting directly. If by any chance a policy is surrendered before the agreed period, an individual is likely to lose his or her funds. This amounts to loses on the side of the policyholder. Finally, the process of acquiring an insurance policy is usually complex and it would be complex for an ordinary person to meet the required standards. In many cases, the agents are not trusted and they end up offering irrelevant products to clients, leading to loses.

The process of claiming for funds from insurance varies from one organization to the other and it depends on the type of the policy applied. However, some steps are fundamental, one of them being reporting the incident as soon as it happens. The insurance company will take an initiative of reporting to the scene in case of accident or any other uncertainty for authentication purposes. It will then be the role of the valuing officer to assess the extent of the risk and ascertain whether any payment process should be initiated. If the occurrence of an event calls for the compensation, the insured will be expected to fill in forms and start the process without any further delay. The process of assessing the risk is usually the most complex and it is often the cause of disagreement for many insurance companies (Green and Rowell 89). Any company will try to avoid paying the insured, citing certain reasons. During assessment, the insured should give out all relevant information to ensure that nothing is left at chance. If accurate information is given, the policyholder will probably be reinstated back to his or her initial financial position in case of a loss or all medical costs will be catered for in case of an accident. If the policyholder dies, his or her family will be compensated adequately and this will relieve the family of the burden.

Works Cited

Green, Michelle and Rowell, Joe. Understanding Health Insurance: A Guide to Billing and Reimbursement. Clifton Park, NY: Delmar Cengage Learning, 2013. Print.

Popow, Donna. Claim Handling Principles and Practices. Malvern, PA: American Institute for Chartered Property Casualty Underwriters/Insurance Institute of America, 2006. Print.

Cite this paper


NerdyBro. (2022, July 25). Life Insurance Policy: Costs and Benefits. Retrieved from


NerdyBro. (2022, July 25). Life Insurance Policy: Costs and Benefits.

Work Cited

"Life Insurance Policy: Costs and Benefits." NerdyBro, 25 July 2022,


NerdyBro. (2022) 'Life Insurance Policy: Costs and Benefits'. 25 July.


NerdyBro. 2022. "Life Insurance Policy: Costs and Benefits." July 25, 2022.

1. NerdyBro. "Life Insurance Policy: Costs and Benefits." July 25, 2022.


NerdyBro. "Life Insurance Policy: Costs and Benefits." July 25, 2022.