Life insurance is basically a legal contract between an insurer and an insurance holder or insurer, in which the insurer promises to cover a designated insured person a specified amount of money upon the insured person’s death. Depending on the contract, additional events like critical illness or terminal illness may also trigger premium payment. The amount of coverage can vary widely from plan to plan, with some policies offering coverage for only a specific period of time while others may provide coverage until the end of your life. However, regardless of the type of policy, insurance cover provides financial security to beneficiaries that you have set forth in your will.
There are two types of life insurance policies: whole life insurance policies and term life insurance policies. In general, whole life insurance plans provide coverage for the entire life of the policy owner, whereas term life insurance only provides coverage within a specified period of time. Whole life policies pay the same premium amounts whether the insured dies during the coverage period or after the coverage expires. With whole life insurance policies, the premium payments may change depending on a number of factors, such as the amount of coverage (including the age of the insured at the time of application) and the risk of death for the insured. Some whole life policies are guaranteed by investments or the investment of the policy owner’s estate, while most have rates that depend largely on the health of the applicant.
Term life insurance policies are less costly, but they do not provide as much coverage. Term policies are drawn from a pool of people who have similar health profiles and are guaranteed a minimum level of coverage until they reach the age of 70. Most Term life insurance companies require potential policyholders to make regular premium payment increases based on their age. Therefore, if you are in need of life insurance right now, you should look into purchasing Term life insurance.
Another type of permanent life insurance policy is variable Life Insurance. This policy provides the insured with an option to change premiums according to the changes in the interest rates or the stock market value of the insured’s chosen investments. When you purchase a variable life insurance policy, you will need to know how much cash is in your account and how much you want to leave the policy along with your death benefit. The Insurance department of your chosen company will provide you with a calculator to help determine these amounts. As with any other type of permanent life insurance policy, you will need to provide the premium payments and the initial investment with your application.
As mentioned above, one of the key things to consider when searching for life insurance is whether or not the insurer will pay the benefit to your beneficiaries should you die before the end of the policy. The two types of permanent life insurance policies are variable and whole life insurance policies. For the policy owner, the beneficiary is the person or persons that will be paid the benefit should you die. The beneficiary will also receive the premium payments if the premium has not been paid.
Most people who are interested in purchasing permanent life insurance policy type are those who have young families. Since term life insurance policies only provide coverage for a specified period of time, most of the time it is not necessary to purchase the policy until you have substantially raised your family. Term life insurance policies are very affordable and can be purchased by individuals on a monthly, quarterly, or annual basis. The premium payments will vary depending on your age, how long you intend to stay covered, as well as the amount you pay for each term.