Insurance Explained

 

 Insurance Explained


What is Life Insurance?
Life insurance is a contract that pays out a sum of money upon the death, typically in exchange for premiums each month. 

In order to be eligible for life insurance, a person needs to show evidence that they have been paying their premiums and have not missed payments or otherwise put the policy in jeopardy. A life assurance policy also includes both survivorship and endowment features with guaranteed income benefits paid out over time. It gives people peace of mind as it ensures their family will be able to provide for them if they die suddenly or need help paying bills after retirement.

What is a Whole Life Plan?
A whole life plan is one that pays out a guaranteed income for the rest of your life. It covers you against both life and death, in exchange for premiums. You are covered even if you become terminally ill. The premiums and benefits are guaranteed by the policy itself, and not based on an investments or the health of a parent company. 

A whole life plan remains in force until death, but some plans offer benefits that extend beyond the term of the policy as well. People generally choose this type of plan for its higher level of coverage, which extends beyond just one person's lifetime. 

What is an Investment Plan?
An investment plan is one that requires a series of premiums to be paid regularly. It allows the insured person to call on the policy's death benefit, in addition to a number of other benefits, such as cash surrender value and dividends, while still alive. 

Because these plans are more flexible with premiums and offer benefits that extend into the future, they usually attract people who are considering their financial options for the long-term. However, if the policyholder should die without any beneficiaries or accession of funds in his account by way of new premiums, then it will lapse.

What is a Cash Value Plan?
A cash value plan pays on the principle of accumulated interest, but does not guarantee a cash payout upon death or the need for premiums. 

With this type of policy, benefits are paid out on the earnings and investment returns within a certain amount of time after you die. When the beneficiary receives cash from such a death policy he or she must pay income tax on it as if he or she had earned that money.

What is an Endowment Plan?
An endowment plan pays out a guaranteed amount upon your death, based on your contributions and interest earned in the plan when you are alive. It is fundamentally different from investment plans and whole life plans in that it does not require regular payments, and the policy's benefits can be increased for future beneficiaries.

If you leave behind a beneficiary, an endowment plan will pay them a guaranteed amount on your death. A cash value plan and an endowment plan are both forms of universal life insurance. 

What is term insurance? 
Term insurance provides protection for a fixed period of time, usually anywhere between one year and ten years. The policy allows you to live your life insured without taking too much risk while it is in force, which makes term insurance perfect for young people who need to protect themselves against high rates of inflation or other economic factors. 

Term insurance is the most cost-effective way to buy life insurance, especially for younger people who are in good health and do not know how long they will live. Here is a good example of the difference between term and permanent insurance. https://www.youtube.com/watch?v=F1j5Krhq-dQ 

What are some of the types of life insurance policies? 
There are four main types of life policies, namely: Term, Whole Life, Universal Life and Endowment Plans. These policies differ in what they pay out once you die, and how much they charge you for the premiums while you are alive. 

Term Insurance: This type of insurance provides coverage for a specific term. They can provide coverage for up to twenty-five years, and are very inexpensive early in life when you are considered healthy and you know how long you will live. 

Universal Life Insurance: This form of insurance is also known as cash value life insurance. It provides coverage for a specific period of time, usually anywhere from three to thirty years, and is paid with regular premiums like an investment plan or term insurance plan. It does not need to be paid up in full when the insured person dies, because it builds cash value over time. 

Whole Life Insurance: This type of insurance provides coverage for the rest of your life. Like universal life insurance, it does not need to be paid up at the time of death, but its cash value builds over time. It has no special time limit, and is paid with regular premiums. 

These three forms of life insurance are all guaranteed underwritten by an insurance company, which means that they are always in force until you die - no matter how old you are or what your health is like. 

Endowment Life Insurance: This type of insurance provides coverage for a specific term, and also pays out a lump sum at the end of that term. It is not guaranteed by an insurance company, but its death benefit is locked in. 

Endowment policies can have a term as short as one year or up to thirty years in length. However, unlike any other form of life insurance these policies do not require regular premiums while you are alive. 


Life Insurance Testimonials from Life Insurance Blog 


https://www.youtube.com/watch?v=F1j5Krhq-dQ https://www.youtube.com/watch?v=1rE7WaweTm0
https://www.youtube.com/watch?v=89XG_Vy8S3o https://www.youtube.com/watch?v=dDYzK0SZ5Q4 https://www.youtube.com/watch?v=H1Iaisk6Zsw 


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Conclusion 
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