When you die, what will happen to your family? Have they been provided for? Will they be able to maintain the lifestyle that they are accustomed to? Are your savings enough to provide for their future expenses? These are questions that a family man or woman always think about in association with their own death. It is only natural for the heads of families to be worried about their families in the event of their death. Fortunately, life insurance policies are around to help ease these worries.
What is actually life insurance policy?
In essence, a life insurance policy is a legally binding agreement between an insurer and the policyholder, whereby the policyholder promises to pay certain amount as premium on monthly, quarterly or yearly basis and in return the insurer promises to pay a stipulated amount to the beneficiary of the policy in case the insured event takes place while the policy is still running. If the policy provides any other benefit, that is because one has made separate agreement for that and is paying something above the cost of insurance. Both the parties have some obligations as well as prerogatives and they must fulfill it to keep the contact valid. For instance, a policy owner decides how much coverage he needs while it is up to the insurer to decide if at all he is ready to provide the coverage and at what rate.
What are the advantages and disadvantages of different types of life insurance policies?
There can be as any types of policies as the underwriters can conceive; but in essence, all of them can be placed under just two categories - the insurance term life and the insurance permanent life let us examine them further.
The term life is actually a pure policy valid for 1, 5, 10, 15, 20, 25 and 30 years only. Its affordable price is its main USP. Indeed, if you buy the policy while you are still young, healthy and without tobacco use, you can get a large coverage at a very affordable rate. Moreover, the rates will remain fixed for the entire duration of the term. On the contrary, its main disadvantage is that the benefits are payable only if the insured dies within the term and so most of the time it lapses without having to pay any benefit. In such a case, one either needs to live uninsured or buy a policy at a much higher rate. If you want to know more about this, you can go online to receive instant term life insurance quotes. You can see how such quotes are going to vary with variation of age and health simply by manipulating the inputs. Such a policy is ideal for people with tight budget; all they are required to do is to decide their need first and then buy the policy covering the entire vulnerable years.
The permanent policies on the other hand are valid for the entire lifespan of the insured. The main advantage of such policy is that whenever the insured dies, his beneficiary can always get the assured benefit. Another advantage is that although the premium rates remain level for the entire duration of policy, some policies allow more freedom in the premium payment. Indeed, you can easily increase or decrease the premiums to be paid to suit your financial condition. Such a policy is very popular among people with fluctuating income. The third advantage is that these policies also offer the scope for compulsory savings.
However, not everything about permanent policies is advantageous. Because they also accrue a cash value by using part of the premium, they need to be overpriced. Moreover, such policies have higher administrative as well as sales cost and so all these often make such policies much too expensive for most of us.
What are Instant Insurance Policies?
Although these cannot be categorized separately, one must mention the life insurance no medical exam policies before one can conclude any article on life insurance. Such policies mostly refer to the term life, but some like graded policies belong to the whole life category. As the name suggests, these policies exempt the applicants from appearing for the mandatory medical test. Consequently, you have a very quick and simplified purchase procedure. All you will have to do is to visit online brokers and fill up a form giving all the inputs correctly. The coverage will be provided on the answers to the health questions asked and if you qualify, you will receive the coverage within twenty four hours. Because the policy takes so little time to complete the underwriting process, it is also referred as instant life insurance policies.
What is actually life insurance policy?
In essence, a life insurance policy is a legally binding agreement between an insurer and the policyholder, whereby the policyholder promises to pay certain amount as premium on monthly, quarterly or yearly basis and in return the insurer promises to pay a stipulated amount to the beneficiary of the policy in case the insured event takes place while the policy is still running. If the policy provides any other benefit, that is because one has made separate agreement for that and is paying something above the cost of insurance. Both the parties have some obligations as well as prerogatives and they must fulfill it to keep the contact valid. For instance, a policy owner decides how much coverage he needs while it is up to the insurer to decide if at all he is ready to provide the coverage and at what rate.
What are the advantages and disadvantages of different types of life insurance policies?
There can be as any types of policies as the underwriters can conceive; but in essence, all of them can be placed under just two categories - the insurance term life and the insurance permanent life let us examine them further.
The term life is actually a pure policy valid for 1, 5, 10, 15, 20, 25 and 30 years only. Its affordable price is its main USP. Indeed, if you buy the policy while you are still young, healthy and without tobacco use, you can get a large coverage at a very affordable rate. Moreover, the rates will remain fixed for the entire duration of the term. On the contrary, its main disadvantage is that the benefits are payable only if the insured dies within the term and so most of the time it lapses without having to pay any benefit. In such a case, one either needs to live uninsured or buy a policy at a much higher rate. If you want to know more about this, you can go online to receive instant term life insurance quotes. You can see how such quotes are going to vary with variation of age and health simply by manipulating the inputs. Such a policy is ideal for people with tight budget; all they are required to do is to decide their need first and then buy the policy covering the entire vulnerable years.
The permanent policies on the other hand are valid for the entire lifespan of the insured. The main advantage of such policy is that whenever the insured dies, his beneficiary can always get the assured benefit. Another advantage is that although the premium rates remain level for the entire duration of policy, some policies allow more freedom in the premium payment. Indeed, you can easily increase or decrease the premiums to be paid to suit your financial condition. Such a policy is very popular among people with fluctuating income. The third advantage is that these policies also offer the scope for compulsory savings.
However, not everything about permanent policies is advantageous. Because they also accrue a cash value by using part of the premium, they need to be overpriced. Moreover, such policies have higher administrative as well as sales cost and so all these often make such policies much too expensive for most of us.
What are Instant Insurance Policies?
Although these cannot be categorized separately, one must mention the life insurance no medical exam policies before one can conclude any article on life insurance. Such policies mostly refer to the term life, but some like graded policies belong to the whole life category. As the name suggests, these policies exempt the applicants from appearing for the mandatory medical test. Consequently, you have a very quick and simplified purchase procedure. All you will have to do is to visit online brokers and fill up a form giving all the inputs correctly. The coverage will be provided on the answers to the health questions asked and if you qualify, you will receive the coverage within twenty four hours. Because the policy takes so little time to complete the underwriting process, it is also referred as instant life insurance policies.
About the Author:
Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life insurance no exam and seguro de vida, visit his site today.
No comments:
Post a Comment