Joint Life Insurance Policy

Joint life insurance policies are similar to endowment policies as they too offer maturity benefits to the policyholders along with all the other benefits by normal Life Insurance policy. Joint life policies are different than normal life insurance as they cover two lives simultaneously, thus offering a unique advantage for a married couple or for partners in a business firm. Under a joint life policy the sum assured is payable on the first death and again on the death of the survivor during the term of the policy. Vested bonuses would also be paid besides the sum assured after the death of the survivor. If one or both the lives survive to the maturity date, the sum assured as well as the vested bonuses are payable on the maturity date. The premiums payable cease on the first death or on the expiry of the selected term, whichever is earlier.

Accident benefits equivalent to the sum assured are available under Joint life insurance policies on the first death. In case both the lives are covered under Double Accident Benefit, the surviving life is covered under Double Accident Benefit until the end of the policy year, in which the first life dies under the cover of the policy.

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Group Insurance

Group insurance offers life insurance protection under group policies to various groups such as employers-employees, professionals, co-operatives, weaker sections of society. Group insurance plans have low premiums. Such plans are particularly beneficial to those for whom other regular policies are a costlier proposition. Group insurance plans extend cover to large segments of the population including those who cannot afford individual insurance. A number of group insurance schemes have been designed for various groups. These include employer-employee groups, associations of professionals like doctors, lawyers, chartered accountants etc.

Group insurance coverage is seen as a major perk for employees from their employers. The premium payments are usually deducted automatically from the pay itself. Some companies will absorb the entire cost of the policy as a benefit for employees. The main advantages of the group insurance schemes are low premium and simple insurability conditions. Premiums are based upon age combination of members, occupation and working conditions of the group.

A major feature of group insurance is that the premium cost on an individual basis may not be risk-based. Instead it is the same amount for all the insured persons in the group. Another distinctive feature is that under group insurance a person will normally remain covered as long as he or she continues to work for a certain employer and pays their insurance premiums. This is different from the individual insurance policy where the insurance company often has the right to reject the renewal of a person's policy, depending on his risk profile.

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Life Insurance: Endowment Policy

An endowment policy covers risk for a specified period. At the end of this policy the sum assured is paid back to the policyholder along with the bonus accumulated during the term of the policy. An endowment life insurance policy is designed primarily to provide a living benefit and only secondarily to provide life insurance protection. Therefore endowment policy is more of an investment than a whole life insurance policy. Endowment life insurance pays the face value of the policy either at the insured's death or at a certain age or after a number of years of premium payment. Endowment policy is an instrument of accumulating capital for a specific purpose and protecting this savings program against the saver's premature death.

Premium on endowment policies is payable for the full term of the endowment policy unless, the insurer dies earlier. When compared to whole life insurance policies, the premium rates for endowment policies are higher and the bonus rates lower. But one of the major attractions of endowment policies is that they provide a return on premium payments when the policy comes to an end. The endowment received at the maturity of the policy can be used for buying an annuity policy to generate a monthly pension for the whole life.

Endowment policies are one of the most popular insurance plans today. It not only provides financial risk cover in case the insurer's premature death but the insurance amount is also repaid once this risk is over.

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Children's Life Insurance

Children’s Life Insurance is a tool many families use to give their children a financial foundation that they can draw upon when they are older. Children’s life insurance will cost you lowest as rates rise with age. The low rates make whole life insurance affordable for almost everyone. Because whole life premiums are locked in at the beginning, they will never increase with the child’s age, regardless of whatever health issues may arise. So this could be looked up as good investment and security.

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Universal Life Insurance

Universal life insurance offers many features of whole life insurance; but essentially allows greater flexibility once the policy is in force. Like whole life insurance, universal life insurance is a permanent policy. It protects the policyholder until death; however long that may be. Also like whole life insurance, universal life insurance accrues cash value over time. But unlike whole life insurance universal life insurance breaks the death benefit and cash value accumulation into separate components. This allows the policy holder to make changes in the policy. For example, if the policyholder wants to increase the death benefit, he/she puts more of the premium money into the insurance account and less into the cash value account or vice versa. The policyholder can decrease the death benefit and increase the cash value contribution. To reduce premiums, the policyholder can pay only the insurance portion. Once the cash value has accumulated, the policyholder can withdraw the money. The money must be paid back, or else the death benefit will be decreased. Some people use the universal life insurance policy as a savings account to draw on as they get older. Others use the accumulating cash value to increase the death benefit so they have more to leave their loved ones. Universal life allows these choices and decisions to be made throughout your lifetime.

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Whole Life Insurance

Whole life insurance covers the policyholder for his or her whole life. There is no fixed end date for the policy, as there is with term life insurance. When the policy holder dies, the face value of the policy which is also known as a death benefit is paid to the person or persons named in the life insurance policy i.e. the beneficiary or beneficiaries. The cost of a whole life insurance policy is spread out across many years and so the premium remains the same. This ensures that older people on a fixed income will not have to cope with rising premiums.

Unlike term life insurance, whole life insurance accrues cash value over time. If you cancel the policy after a certain amount of time has passed, the insurance company will surrender the cash value to you. The cash value is scheduled to equal the face value when the policyholder reaches the age of 100. If you live that long, the insurance company will likely pay the face value to you in a lump sum. This is not the only way to use the cash value, however. You can also borrow some of the cash value as a loan. The money has to be paid back, but there is no approval process and no risk of being turned down. You are your own lender. Some whole life insurance pays dividends, so it can be used to supplement your retirement income.

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Term Life Insurance

Term life insurance is also called as term assurance. It is a life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount. Term insurance is considered the cheapest plan available in the market. It is a pure protection plan and basically designed to protect you from unexpected circumstances. It is suitable for those with not so normal health conditions and comes in three types with varied sum assured: level benefit, increasing benefit and decreasing benefit.

The first thing to be decided while buying a term insurance is the sum assured. This is arrived after considering the lifestyle and the current debts of the person taking it up. In the event of the death of the person the sum assured could be used to repay the debt. Term insurance does not give maturity benefit to the buyer. Nevertheless, one can buy riders to the term policies that could give premium on maturity. If the buyer dies before the maturity, the nominee gets the sum assured.

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