Actually, life insurance is an agreement between the insured and
insurance company. The insurance company agrees to pay a certain amount of money to the insured’s beneficiary in case of death of the insured. A beneficiary may claim for
the policy only if the premiums of the insured are current.
The life insurance policy offers security to the surviving
family members in case the death of a loved one. The insurance company tries to
overwhelm the loss by paying a sum of money. People may buy a life insurance
policy from individuals or insurance companies. Sometimes the government offers
group life insurance to government employees at no cost. Employees can obtain
life insurance at reduced rates from the insurance company of their employer.
Cost is the major factor in the life insurance policy that
totally depends on life, health and occupation of the insured. It can be
illustrated as the insurance policy of 24 years old person is inexpensive compared
to the 60 years old person. It is available in different types such as whole
life insurance, variable life insurance and term life insurance.
Premiums in the initial stages, of the term life insurance
policy, are low but it increases gradually as the insured grows mature. Whereas
a part of each premium pays for insurance and rest works as a tax-free investment
in case of whole life and variable life insurance. Amount of premium doesn’t
change throughout the entire policy. It is used to increase the death benefit in
the end.
Premium remains the same in variable life insurance. It
provides permanent protection to the insured. It doesn’t offer a guarantee to
amount of cash value during lifetime of the insured.
Choose the best life insurance policy for your lifestyle.
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