Different types of life insurance policies

Different types of life insurance policies
April 20 14:22 2017 Print This Article

There are different kinds of insurance done by people and life insurance is one of them. Life insurance is a contract between an insurer and an insurance holder, where the former promises to pay the insured person a specific amount of money, upon the death of the latter. It is basically a protection provided to the insurance holder in exchange for premiums. Life insurance is beneficial to all as there are different types of life insurance to suit the needs of different people. It totally depends on a person’s needs and goals regarding a life insurance. All the banks provide the facility of life insurance so it’s very convenient to get a life insurance.

If in case something happens to you, life insurance protects the people whom you care about. There are varieties of life insurance policies and you can choose any which suit your needs and fulfill your goals. But before you choose, you should be aware of the priorities you want to fulfill through life insurance and that the premium fits comfortably in your financial plan.

On-line insurance concept. Man press keyboard button with text insurance.

Term insurance policy is a type of life insurance which is generally less expensive than whole life insurance and is for a specific time period. During that time period, the premium amount remains the same. After the term ends, the premium is to be paid at a higher rate than before. This type of insurance usually meets your financial goals like college fees, paying off the mortgage etc.

Level-term insurance is appropriate as it locks your age and health, unlike increasing-premium policies which increase year after year.

Another type is whole life insurance policy which is a permanent life insurance and it gives lifetime protection. As it gives lifetime coverage, the premium rate is also higher than term insurance policy. Whole life insurance has some benefits like it has a cash value which serves the saving purpose, premium payments are also fixed. This type of life insurance is appropriate for those who want to pass down the wealth to their beneficiaries as it helps to preserve the wealth. It can also help to build equity. It even allows the holders to stop paying the premium after certain years as company’s fund is enough to carry on the policy. Holders can also withdraw some money as a loan in case liquidity is needed. So, whole and term insurance are both useful in their own ways and it’s for you to choose.

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Jones Steven
Jones Steven

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