Saturday, March 27, 2010

Basic Informations of Various Types of Life Insurance

Being a family member its of prior importance that you must secure your family so when you will be no longer there to take their responsibilities their life wouldn't be hampered. They can be able to afford the same lifestyle as they used to do in your presence. Your beloved ones' can get a constant financial support even after your death while you insure them with life insurance.

Being a policy holder you can protect those people whom you love most from financial crisis of your demise. Your insurer will disburse a death benefit to the death beneficiary.Before going to buy a life policy you should be informed enough about all kinds of terms and conditions or clause of different types of life insurance policy. If you don’t have the sound knowledge about policy packages then you can’t choose your desirable one.

There are two basic type of life insurance such as term life insurance and whole life insurance. In term insurance the coverage should be of a limited period of time. The policy holder can determine whether he wants to continue with the policy or cancel the coverage. At the time of agreement you have to make a person nominated who the insurance company hand over the assured amount on your death. The biggest advantage of this type term policy is that for any kind of policy package you pay a premium at lowest rate.

The other type of life insurance is whole life policy. It provides you the coverage for rest of the life. Being a whole life insured you have to pay a premium on monthly basis until his death. It’s of a great use. Some portion of your premium can be stored for savings and helps to build up a cash value and the other part would be utilized for your future usage. You can be qualified of borrowing money against this cash benefit so it will help you to create an estate.

When this type of insurance reaches it's maturity insurer provides certain amount as face value which you have invested over a period of time. It has another advantage that if your demise will be happened before the tenure of the policy expired then the left behind or nominee can get the sum assured along with the turns against your investment.

Some other type of life insurance policies are there. They are explained briefly below.

Endowment policy is designed to satisfy some special purposes like retirement planning, child's higher education and marriage etc. The sum assured should be paid to the policy holder if he survive the policy term.

Annuity and pension : In this type of life insurance policy the insurer provides a stipulated amount to the policy holder within an interval of time period.The annuity supply you financial back up in the form of pension at regular interval.

Universal insurance allows you to transfer your fund in between the insurance and savings part. The premium rate is very flexible. The cash value is dependent upon the increase and decrease of it.

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