Life insurance is designed to provide protection against the major risk of death. The insured does not receive any sort of benefits from having a life insurance policy. Life insurance policies are intended to take care of a person’s affairs after they pass and are no longer able to do so themselves. There are many different kinds of life insurance policies available from insurers and insurance companies such as LIC.
One broad category of life insurance is permanent life insurance. Unlike term life insurance, permanent life insurance provides lifelong coverage for making regular premium payments. One type of permanent life insurance is whole life insurance. Whole life insurance provides coverage for whenever the policyholder dies. When the death occurs, a specific amount of money will be given to the beneficiary of the policy. With whole life insurance, there is a cash value to the policy. The insured may borrow against this amount.
Another kind of permanent life insurance is an endowment plan. This kind of life insurance policy is rather flexible. The specific benefit amount is paid to the insured person at the conclusion of the policy term. This payment occurs whether or not death has occurred. This is one of the few types of life insurance policies that provide any direct benefit to the insured.
Universal life insurance is another kind of life insurance that falls under the permanent life insurance umbrella. Some may also refer to this kind of coverage as flexible premium adjustable life insurance. There is an investment piece to this life insurance. The insurance company will guarantee a minimum return on your money. The insurance company will invest a part of the premium. Usually with this type of life insurance policy there are two options in regards to how the death benefit will be paid. One of these is paying out the cash value of the policy. The second manner is to pay the face value of the policy with any accumulated cash.
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