What Is Permanent Life Insurance?
Life insurance is basically a contract between an insurer and an insurance beneficiary, whereby the insurer pledges to pay out a designated amount of money to an insurance beneficiary upon the death of that insured individual. Depending on the contract, certain events like critical illnesses or terminal illness may also trigger coverage payments. A term life insurance plan is similar to life insurance but provides coverage only for a stated period of time.
It is necessary for everyone to purchase life insurance to ensure that in case of the insured’s demise, the family will be able to get the assistance they need. There are several types of policies available and depending on your health history, budget, preferences and the kind of insurance agent you work with, the coverage amount and premiums could range from being minimal to expensive. If you have a good health history then you may not have to worry about the premiums as you would have if you had a bad health history. However, it is important to check with the agent because some policies do have a high premium due to the fact that the risk of dying is very high for this age group.
One type of permanent life insurance policy is the whole life policy. This policy is designed to provide coverage for your entire lifetime. However, it is necessary to always renew your term policy which is usually at the end of your life expectancy. You must always remember that the policy does not pay you any interest. It is merely a way to help your loved ones when you die.
A universal or term insurance has a death benefit which is the sum of all premiums paid plus any accumulated death benefit at the time of your death. The final expenses policy is similar to the whole life policy but allows the beneficiary to make payment of his or her claim immediately after your death. Usually this type of insurance also has a clause allowing for the payment of expenses in the event of your disability or incapacity. These are the most popular types of policies.
In addition to the above, there are also variable life insurance policies in which you can choose from a variety of plans. Basically these are the permanent life insurance policies where you and your family can choose from a number of different options such as putting money into an investment account, cashing in on a pension or social security and so on. Some policies also allow you to choose between making payments to your beneficiaries and making payments to your beneficiary if they die. These options can be beneficial to families who wish to have varying amounts paid out to their beneficiaries depending on their lives.
If you are considering purchasing life insurance but do not know what kind of policy to purchase then you should research more about permanent life insurance policies. As you look further into this type of policy it is important to decide what you really need. Do you really need to protect your home and family? Is having enough money and assets important? Or do you simply want the comfort of knowing that your loved ones will be taken care of even if you are not?