Friday, July 29, 2011

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.

Saturday, July 16, 2011

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.

Sunday, July 10, 2011

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.

Thursday, July 7, 2011

Life Insurance

Life insurance offers a way to replace the loss of income that occurs when someone dies. It is a contract between you as the insured person and the company that is providing the insurance. If you die while the contract is in force, the insurance company pays a specified sum of money free of income tax to the person you name as beneficiaries. It is a insurance for you and your family's peace of mind. Its function is to help beneficiaries financially after the owner of the policy dies.
It can also be a form of savings in the long run if you purchase a plan, which offers the option of contributing regularly. Additionally, a little known function of life insurance is that it can be tied in with a person's pension plan. A person can make contributions to a pension that is funded by a life insurance company. These are considered private pension arrangements.
1.      Term Life Insurance
2.      Whole Life Insurance
3.      Universal Life Insurance
4.      Children's Life Insurance
5.      Senior Life Insurance
6.      Mortgage Protection Life Insurance