Life insurance is simply a contract between a policy holder or insurer and an insurer or issuer, whereby the insurer agrees to cover a designated insured individual a specified amount of cash upon the insured person’s death. Depending on the contract, beneficiaries may include a spouse, dependent children, or even some property owned by the insured. Benefits are paid either annually or semi-annually. They are typically tax-free and non-taxable too. In addition, some life insurance policies are also able to convert into an annuity.
A policy type such as whole life insurance is one that pays the death benefit, as well as any premiums and charges accrued during the policy period. Others pay an immediate death benefit. Most policies also have variable coverage amounts, and most also feature an optional additional benefit known as an emergency benefit. The benefit being offered here is usually the difference between the cash value of the policy and the face value of the policy. The emergency benefit is there to cover expenses not covered by the cash value of the policy.
A life insurance policy can be either guaranteed or non-guaranteed. With a guaranteed life insurance policy, the insurance company issues such policy to the named beneficiary. This means the beneficiary will receive the same premium payments throughout the policy period, with no variation. Non-guaranteed life insurance policies vary slightly from their guaranteed counterparts. However, they too offer premium payments that are set by the insurance company.
As a policy holder, it is your responsibility to make sure you are sufficiently covered. Most importantly, it allows you to save your family and/or loved ones from financial hardship in case you die. Therefore, it should be noted that a policy is not an expense but is an investment for your family’s future. A thorough study of various Life Insurance products should be undertaken prior to signing up for one. This will allow you to choose the right product that meets your needs and that best suits your budget.
Whole Life Insurance premiums will always be less than the death benefit. In a whole life policy, the death benefit is paid first and this is used to pay the initial premium of the policy and the final expenses, like administration, probate and litigation. Any residual income from the policy is distributed to the beneficiaries. The policy holders pay regular premiums and there are no maturity charges.
For families who wish to have an income replacement after the insured has passed on, then there are a number of options available. Variable Life Insurance Quotes provide excellent alternatives to fixed and single premium whole life insurance products. The Quicken Income Replacement Plan provides an easy way to replace income for families in need, in the event of insured loved ones’ death. Thus, an adequate Life Insurance quote can give you the peace of mind required to plan for your family’s future without worrying about the financial liability after you pass away.