Must Read About Life Insurance Before join any policy

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The basic and primary purpose of Life Insurance Policy is to protect the financial interests of the insured’s family. Death Benefit/Sum Assured is the money which is the insurer assures to pay to the nominee/beneficiary of the policy holder after his/her death.

There are 3 basic important which are related to life insurance, namely:

Premium 

An individual is only cover by insurance policy if he/she pay a certain sum of money towards the policy. Which may also called as Investment in present and return in future.

Death Benefit/Sum Assured

This is the money which the insurance company promise to pay to the nominee/beneficiary of the policy holder after his/her demise.
Term

An insurance policy provide protection for a certain period of time that is known as term. This term it could vary based on the type of policy chosen.

Life Insurance is one of the most important which an individual should have for the more future of his family in his absence. This article will help you to recognize the actual importance and requirement of life insurance policy. Life insurance is one of the pillars that support for personal finance deserving of consideration by every household.
Life insurance is generally a contract between an insurance policy holders an insurer, where an insurer promise to pay between sum of money in exchange of premium to its beneficiary it may also payable upon the death of an insured person (often the policy holder). The policy holder typically pays a premium in fixed or lump sums amount.
Life policies are based on legal contract and the term of the contract describe the limitations of the insured events. There are some specific exclusions are often written into the contract to limit the liability of the insurer, common example are claims relating to suicide, fraud, war, riot, and civil commotion.

Term Insurance

The term insurance provide life insurance coverage for a specified term. The policy does not accumulate cash value. The term insurance is less expensive as compare to the equivalent permanent policy but will become higher with the age.

Whole Life

The whole life policy plan provide lifetime coverage for a set premium amount.

Endowments Policy

The endowments policy is a life insurance which is designed to pay lump sum after a specific term on its maturity or on the death of insurance holder. Generally this type of policy maturities are happen on ten, fifteen or twenty year’s up to a certain age limit. But some policies also pay out in the case of some critical illness.

Unit Linked Insurance Plan

These are the unique plans in the insurance which are basically a mutual fund and term insurance plan rolled into one. The investor does not participate in the profit but they get the return which based on the return on the funds he or she had chosen.

Money Back policy

In the money back policy it provide life coverage during the term of the policy and the maturity benefit are paid in the installment basis. Survival benefits are paid in every 5 years. This type of plan is available for the 20 years and 25 years term policy only.

Permanent Life Insurance

In this policy is covered the remaining lifetime of the policy holder. A permanent insurance policy accumulates a cash value up to its date of maturity. The policy holder can access the money in the cash value just by withdrawing money, borrowing the cash value, or surrounding the policy.

Accidental death

This is a type of life insurance that is designed to cover the insurance holder from the accidental death and not from the non-accident-death for e.g. Health related problem or suicide. Because it cover only accidents, these policies are less expensive than any other life insurance policies.

Group life insurance

It is also known as large-scale life insurance or institutional life insurance in this life insurance it cover the whole group of people, usually employ of the company, member of association, members of a pension superannuation fund. Group life insurance allow the member exiting the group to maintain their coverage by buying themself individual coverage. The underwriting is carried out for the whole group instead of individual.

Insurance vs Assurance

The specific use of term are “insurance” and “assurance”. “Insurance” means that providing coverage for an event that might be happen (fire, theft, flood, etc.) while “Assurance” is the provision of coverage for a might certain to happen. While in United State, both forms of coverage are called as “insurance” for the reason of simplicity in companies selling both product. By some of the definition it is clear that “insurance” is any coverage that determine benefits based on the actual losses where as “assurance” is the coverage with predetermine benefits irrespective of the losses incurred.

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