There are several different kinds of life insurance policies available in the market these days. A little research will reveal to you just how many different options you have. Although all life insurances serve the same purpose of ensuring your and your survivors’ financial comfort, different life insurance policies offer you various attractive options.
Life insurance can be divided into two broad categories
· Term Life Insurance – this policy any be adopted by anyone and is meant to take care of any short-term requirements that you may have. You can claim compensation in the case of an accident or some other sort of mishap in the case of a term life insurance plan. This kind of policy is basically meant for those people who feel the need for potential short-term insurance, but it also compensates the bereaved in the case of a death in the family.
Term life plans range from one to a hundred years and are usually convertible and renewable. These plans usually expire at the age of 75. If you opt for a hundred year plan, along with cash value, then this plan subsequently becomes of a part of a whole life plan. It must be kept in mind that it usually works out cheaper to go in for a whole life insurance policy than a non-cash term policy that lasts a hundred years.
· Permanent Life Insurance – The value of this kind of life insurance policy increases with time and the coverage is valid for the entire life of the individual. Widely used of insurance policies of this kind are the par and non – par ones. In the case of par whole life coverage, dividends are generated which are a partial return of the premium paid for investment growth and coverage. The dividends keep on changing every year. This is in contrast to the non-par insurance policies, which do not offer you any dividends. The cash values in the case of permanent life insurance plans are guaranteed. They are not projected figures.
· There is another kind of policy available, besides the two mentioned above. This is the whole-life quick pay premium policy. This kind of policy involves having to pay a fixed premium for a short time period, until it is entirely paid. The death benefit you get from this policy is leveled and then paid at the time of the cessation of the premium.
· You have the option of fracturing your policy in terms of premium that is payable for 15, 20 and 65 years of age. There is usually not much change in the terms and conditions in this kind of life insurance policy.
· Those people should avail of a universal life insurance policy, who have a requirement for life insurance, have a large marginal tax bracket and also have quite large RRSP and pension contributions. You should also be paying a good amount of tax on your investment income and should want to have a future income and investment prospect. This particular kind of life insurance policy is supposed to be the most difficult of all the available policies.
Related posts: