What is Life Insurance? Benefits, Types & Coverage

Life insurance in Bangladesh has come a long way since its inception in the early 1960s. Initially, the government established the Bangladesh National Insurance Company (BNIC) in 1965 and the country has since seen the establishment of several private life insurance companies and aggregators.

In recent years, the life insurance sector in Bangladesh has grown significantly, with an emphasis on providing comprehensive coverage and protection to the citizens of the country. This article will discuss the benefits of life insurance in Bangladesh, the various types of life insurance policies available, and the challenges facing the industry.

Life insurance in Bangladesh offers many benefits for citizens, such as financial security and peace of mind. It is a form of protection that can help protect individuals against financial loss due to unexpected events, such as death, illness, or disability.

Life insurance can also provide funds for medical expenses and other costs associated with end-of-life care. It can also provide a lump sum payout to beneficiaries in the event of death, which can help to cover funeral expenses, medical bills, and other debts.

In addition, life insurance can provide a retirement income during retirement, allowing individuals to maintain their standard of living.

What is life insurance?

Life insurance is a type of insurance policy that provides financial protection for a designated beneficiary in the event of the policyholder’s death or other specified events. A life insurance policy provides a lump sum payment to the beneficiary (or beneficiaries) upon the death of the insured.

Life insurance policies differ in terms of the amount of coverage, the length of the policy, the payment terms, and the premium payments. Premium payments are generally determined by the policyholder’s age, health, and lifestyle.

Why Life Insurance in Bangladesh?

Life insurance in Bangladesh is an important tool for providing financial security for individuals and families. Life insurance can provide necessary funds to cover funeral expenses, medical bills, and other debts in the event of death, allowing families to maintain their standard of living.

In addition, life insurance can provide a lump sum payout to beneficiaries. Life insurance policies can also provide retirement income during retirement, which can help ensure individuals and families maintain their standard of living.

Benefits of Life Insurance

• Financial security and peace of mind
• Lump sum payout to beneficiaries upon death
• Funds for medical bills and other costs associated with end-of-life care
• Retirement income during retirement
• Tax benefits
• Coverage for dependents
• Coverage for high-risk individuals
• Flexible terms and premium payments
• Savings and investment options
• Charitable donations

Types of Life Insurance

There are several different types of life insurance policies available in Bangladesh. Term life insurance is the most common type, offering coverage for a fixed period of time, usually from 1 to 20 years. Whole life insurance provides coverage for the policyholder’s entire life and includes a savings component.

Universal life insurance offers flexible premiums and allows policyholders to choose their benefit amount and coverage period. Variable life insurance combines life insurance with a savings account, allowing policyholders to invest in stocks, bonds, and mutual funds.

Finally, indexed universal life insurance provides a death benefit and cash value that are linked to a stock market index.

Who Needs Life Insurance?

Life insurance is an important financial tool for anyone who wants to provide financial security for their family in the event of their death or disability. Life insurance can provide a lump sum payout to beneficiaries upon death, which can help to cover funeral expenses, medical bills, and other debts. It can also provide a retirement income during retirement, allowing individuals to maintain their standard of living.

Additionally, life insurance can provide funds for medical expenses and other costs associated with end-of-life care. Therefore, anyone who wants to ensure their family’s financial security should consider life insurance.

How Do You Get Life Insurance in Bangladesh?

1. Determine Your Insurance Needs: Before you begin buying life insurance in Bangladesh, it is important to determine your insurance needs. Think about your current financial situation and your future needs. Consider factors such as your salary, existing debts, number of dependents, and any other financial obligations you may have.

2. Choose the Right Type of Life Insurance: There are several types of life insurance available in Bangladesh. The most common types include term life insurance, whole life insurance, and universal life insurance. Each of these policies has its own advantages and disadvantages, so it is important to consider your needs carefully before deciding which type of policy is best for you.

3. Shop Around for Rates: Once you have decided which type of policy is best for you, it is important to compare rates from different life insurance companies in Bangladesh. This will allow you to find the best deal for your specific needs.

4. Check Your Policy’s Terms and Conditions: Before you purchase any life insurance policy, be sure to read the terms and conditions carefully. This will help you to understand what is covered by the policy and what is not.

5. Make Your Purchase: Once you have compared rates and read the policy’s terms and conditions, you can make your purchase. Be sure to keep all of your paperwork in a safe place, as you will need it in the future if you ever have to make a claim.

How Much Does Life Insurance Cost?

The cost of life insurance in Bangladesh can vary depending on the type of policy you choose, the amount of coverage you need, and other factors such as your age and health. Term life insurance is typically the most affordable option, while whole life insurance policies can be more expensive.

Universal life insurance policies are usually the most expensive, but they can provide more flexibility than other types of policies. The best way to get an accurate estimate of how much life insurance will cost you is to speak to an experienced insurance agent who can review your individual situation and provide you with a quote.

How Life Insurance Works?

1. Understand the Basics: Life insurance is a contract between an insurance company and an individual. The individual pays a premium to the insurer in exchange for a death benefit. In the event of the insured individual's death, the insurer will pay out the death benefit to the designated beneficiary.

2. Choose the Right Type of Policy: There are several different types of life insurance policies available, including term life insurance, whole life insurance, and universal life insurance. It is important to understand the differences between these policies and choose the one that best suits your needs.

3. Consider Your Insurance Needs: Before you purchase a life insurance policy, it is important to consider your insurance needs. Think about your current financial situation and any future needs you may have. Also consider factors such as your salary, existing debts, number of dependents, and any other financial obligations you may have.

4. Buy the Right Amount of Coverage: Once you have determined your insurance needs, you can decide how much coverage you need. It is important to buy enough coverage to meet your needs, but not so much that you are paying for coverage that you don’t need.

5. Shop Around for Rates: Once you have decided how much coverage you need, it is important to shop around for rates. Compare rates from different life insurance companies in Bangladesh to find the best deal for your specific needs.

6. Get Your Policy: Once you have chosen the right type of policy and compared rates, you can purchase your life insurance policy. Be sure to keep all of your paperwork in a safe place, as you will need it in the future if you ever have to make a claim.

Life Insurance Companies or Aggregators List in Bangladesh

1. Carnival Assure (life insurance aggregator) 

2. Pragati Insurance

3. Delta Life Insurance

4. Green Delta Insurance

5. Sadharan Bima Corporation

6. Popular Life Insurance

7. Asia Insurance

8. SunLife Insurance

9. Meghna Life Insurance

10. United Insurance

11. Prime Insurance

12. Guardian Life Insurance

13. MetLife Insurance

14. Delta Brac Life Insurance

15. Dhaka Insurance

16. National Life Insurance

Conclusion

To sum up, life insurance is an important financial tool that can help protect your family and provide them with financial security in the event of your death. There are several different types of life insurance available in Bangladesh, so it is important to consider your needs carefully before deciding which type of policy is best for you.

Shopping around for rates from different insurance companies and aggregators can help you find the best deal for your specific needs. Once you have chosen the right type of policy, it is important to read the terms and conditions carefully and keep all of your paperwork in a safe place.