What Are the Types of Life Insurance Policies?
By Scott Dell
Life insurance is an agreement with the insurance company and the policy owner. The company offers to pay a sum of money upon the death or severe illness of the policy owner. The policy owner signs an agreement to pay a premium in return to the company at regular intervals.
There are different types of life insurance. Term insurance is the simplest form of insurance wherein you purchase the insurance coverage for a specific period, for a specific amount. There is no investment component for this policy and if the insurer dies within the period of the coverage, the beneficiary gets the assured sum.
Whole life insurance is similar to term insurance but, here you buy the insurance for the whole life, not for a particular period. In this policy, the company compliments a portion of your premium. Some companies offer dividends to the policy holders.
Universal life insurance is a permanent insurance where premium payments above the cost of insurance are credited to the cash value. The cash value is credited with interest in every month and the policy is debited each month by a cost of insurance charge, and any other policy charges and fees which are drawn from the cash value if no premium payment is made that month.
Variable life insurance policy is a variation of the universal insurance and it allows the policy holders to choose the investment vehicles. Here the policy holder gets a wider choice on investmnet products including stock funds. The premium boundaries are set by the insurance company and these are the bst policy for those with changing financial needs.
There are many advantages on taking a life insurance coverage policy. The first and the most important one is that your dear ones will be taken care of the insurance amount. It is the best thing to protect your family on your death. They don't have to depend on others on your absence. This means a lot when you look into wht you can do for them in your absence.
Before jumping into a policy, consult with your insurance agent as he is the person to guide you on choosing the decent policy for you. Talk to him about your specific needs and he will explain you the different policies that are suitable for you. You can easily select one that suits your budget and need.
Scott Dell has written articles on various subjects for the past several years. He enjoys writing on a wide range of subjects. You can check out his newest website about Designer Diaper Bags to find helpful information regarding Kate Spade Diaper Bags
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