Life Insurance Basics
There are many kinds of insurance policies that can be purchased by people. Of these a Life Insurance policy is the one which covers a person for his or her entire life.
According to this agreement, the insurance company agrees to pay a specific sum of money after the death of the person who is being insured. In return the person who purchases life insurance plan pays a premium at regular intervals of time.
It is important that the death of the insured person happens because of an insured event that has been specified in the agreement. Serious illness is the most common type of insured event that is specified in insurance plans.
Many types of life insurance plans are available for people these days. A feasible plan can be selected by a person according to his needs and requirements and after comparing the various types of insurance plans.
A term life insurance policy or a temporary insurance policy is the one which is very popular and the most commonly used type of a life policy. This type of a policy covers the life of the person being insured only for a specific period of time; say a period of 5, 10 or 20 years. If the person who has been insured with the plan dies within the term of the policy, the beneficiaries get cash benefit. However, if the policy term expires and the policy is not renewed, no cash benefits are given out by the insurance company.
Another type of a life policy is the whole Life Insurance policy which covers the insured person for his entire life. According to this policy, when the insured person dies, a certain sum of money is paid to the beneficiaries named in the contract.
The amount of premium for whole life time insurance remains the same throughout the life of a person. This is mainly because the cost of this type of insurance is spread over many years. In this type of a policy, cash gets accrued over time and is paid in a lump sum.
A universal life policy is the one which pays a sum of money after the death of the policy holder. This type of insurance is divided into death benefit and cash benefit. Cash benefit can be withdrawn as and when the person who holds the policy requires money.
According to this agreement, the insurance company agrees to pay a specific sum of money after the death of the person who is being insured. In return the person who purchases life insurance plan pays a premium at regular intervals of time.
It is important that the death of the insured person happens because of an insured event that has been specified in the agreement. Serious illness is the most common type of insured event that is specified in insurance plans.
Many types of life insurance plans are available for people these days. A feasible plan can be selected by a person according to his needs and requirements and after comparing the various types of insurance plans.
A term life insurance policy or a temporary insurance policy is the one which is very popular and the most commonly used type of a life policy. This type of a policy covers the life of the person being insured only for a specific period of time; say a period of 5, 10 or 20 years. If the person who has been insured with the plan dies within the term of the policy, the beneficiaries get cash benefit. However, if the policy term expires and the policy is not renewed, no cash benefits are given out by the insurance company.
Another type of a life policy is the whole Life Insurance policy which covers the insured person for his entire life. According to this policy, when the insured person dies, a certain sum of money is paid to the beneficiaries named in the contract.
The amount of premium for whole life time insurance remains the same throughout the life of a person. This is mainly because the cost of this type of insurance is spread over many years. In this type of a policy, cash gets accrued over time and is paid in a lump sum.
A universal life policy is the one which pays a sum of money after the death of the policy holder. This type of insurance is divided into death benefit and cash benefit. Cash benefit can be withdrawn as and when the person who holds the policy requires money.
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