Life Insurance Policies
The term “insurance” is suggested for the people, who for the certain period of time need the death benefit. The life insurance is a policy that provides a payment in cash when a person dies. The certain payment is known as the “death benefit”. Many people in the world buy the life insurance policies to protect those people who are dependent on them. And the other people buys the life insurance policies as a way to leave the cash gift to their (children, grandchildren and charities) at their death. If you have make up your mind to buy an insurance policy you have to think and made a decision that which type of policy is suitable for you, since there are many types of policies. The life insurance policy is written on the life specific person is known is “insured”. The owner of an insurance policy make payments in the shape of premiums to the insurance company he/she has chosen for the insurance policy. In return, the insurance company agrees to pay the beneficiary the death benefit. The term insurance is the most basic type of life insurance.
The term of life insurance policy is usually one to 30 years. One type of life insurance policy is known as “whole life”. It is a policy that pays the death benefit no matter when the insured one dies. The premium of this policy is much higher than the other life insurance policies and you have to pay the full premiums. This type of policy works for those people who want a guaranteed death benefit no matter for how long the insured person lives, and who have the enough money to pay for this type of insurance. Another type of life insurance is the “universal life”. This type of life insurance policy is similar to whole life insurance. However in this type of insurance policy the insured have the choice of changing the premiums and also the death benefit as well. For example the policy owner decides to double the premium paid in one year, the extra money of the policy owner will be added into the cash value accounts. That will pay the policy at least three or four percent interest. Another year the owner may decide not to pay the current premiums of a policy and can use the cash value accounts money to pay the premiums.
The insurance policy owners may have higher death benefit when the policy owners children’s are younger, and at the same time can have lower death benefit then his/her children are grown. Another type of life insurance policy is the Variable universal life. This policy is a special type of universal policy which allows the cash value account to be invested in stocks, bonds, securities and other types of securities, which allows the owner of an insurance policy to earn more interest and more benefits that are available. This type of policy is for those types of people who want life time coverage and who are not afraid of taking risk. The buyer of this type of insurance policy would be encouraged and prefer to invest the money in stocks, bonds and securities to safer assets. Premium is the amount that is paid to the insurance company till the maturity of the policy.