Types Of Life Insurance And Their Benefits
ď‚ž Life
insurances are important today to help family and loved ones stay financially secured in case of one’s demise.
ď‚ž Today
multiple types of life insurances are available for one to choose from based on their need and affordability.
Whole Life ď‚ž Whole
life insurances or permanent coverage policies offer an insurance protection for the insured entire life
ď‚ž Usually
have a high initial premium amount.
ď‚ž These
carry a component that grows tax deferred at a certain guaranteed amount until the contract is closed.
Universal Life Also
known as adjustable life insurances or flexible premium.
The
cash values, premiums and the amount of protections can be adjusted during the contract as per the insured’s change of needs.
The
cash values earn an interest rate that is set periodically by the insurance providing company.
Variable Life ď‚ž Combines
the traditional protection and the savings component of the whole life insurance policies.
ď‚ž The
value of cash and death benefit may fluctuate due to investment features hence called variable life policy.
Has
two major features-
a.
the general account: the reserve account of the insurance provider and not part of the individual’s policy
b.
the separate account: comprises of various investment funds like equity fund within the insurance company’s portfolio.
Term Life ď‚ž Allows
a list of beneficiaries to be protected from financial loss due to the death of the insured.
ď‚ž Provides
protection for only a definite period of time but can be renewed.
ď‚ž Do
not build cash values and the premiums for these policies are comparatively lower than other type of policies.
ď‚ž Some
major types of term life policies are:
a.
Level term: Has a initial premium level for a specific period. These can be renewed and the premiums increase as the insured gets older.
b.
Decreasing term: Has a level premium but the death benefit decreases with time.
c.
Annual renewable: Provides protection for one year but can be renewed annually.
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