I am sure that you have heard of life insurance, but do you know what it does? Life insurance is a policy that provides financial assistance in case the insured person dies. It can be in the form of a lump sum amount or a monthly payment. This is a type of insurance that can be bought from any insurance company and can also be bought through the government. The premiums are calculated based on the age of the insured person, the risk involved and the amount of money that the insured person will get after his death.
There are many types of life insurance policies available. The most common ones are:
* Term life insurance
* Whole life insurance
* Universal life insurance
* Variable life insurance
Term life insurance is a fixed term policy that provides a certain amount of money to the insured person in the event of his death. This type of policy is normally taken for a period of time between 1 to 20 years. After this period, if the policy holder does not die within the term of the policy then he will lose all the money provided by the policy. In addition to this, the premiums paid during the policy period will be forfeited.
A whole life insurance policy is a type of insurance that is taken for the entire life of the insured person. The premiums are higher than those for term life insurance. In this policy, the premiums are payable throughout the life of the insured person. If the insured person dies before the end of the policy, the insurance company pays out the remaining amount. However, the premiums are payable throughout your life. If you stop paying the premiums, you will forfeit all the money that you have invested.
Universal life insurance is a type of life insurance where the premium is payable for the entire life of the person. The premiums are lower than those for the whole life insurance policy. However, there is a provision in the policy that allows the policy holder to make changes in the policy after a specific period. This period is usually 5 to 10 years. The insured person can change the amount of coverage, the term of the policy and the premium rates.
Variable life insurance is another type of insurance policy that provides coverage to the insured person for the entire life of the policy holder. This type of insurance has low premiums. However, it has a clause in the policy that allows the insured person to make changes in the amount of coverage, the terms of the policy and the premium rate at any point of time.
The main benefit of buying life insurance is that it gives financial security to your family in case something happens to you. It is an investment that can give you financial security even when you are alive.