Life Insurance is something which is the shoulder of your family after you. Buying life insurance is the best way to keep your family secure and safe after you. It keeps you free of mind and relaxes about your family security. Life insurance will leave your children wealthy.
Life insurance protects your family and pays you on the name of the person who died. They will take care of your family financially by paying insurance amount. The basic idea of an insurance company is to project a family of insured person financially after his or her death.
How it works?
We will talk later about these basic insurances. Let’s talk other basic things of life insurance policy. If you are a buyer of Life insurance policy you have to pay monthly or yearly premium. This is an installment which you will get back after your death to your family and stand as the strong shoulder. For return there are different policy forms by which you can get back like monthly, yearly or divided in some percentage.
There are 3 basic types of life insurance policies which a buyer must know and know more how life insurance work.
Term Life Premium
Another name of term life premium is known as pure life insurance policy. This is the type of life insurance policy which is fabricated to protect one for a specific span of time such as 10 years to 20 years. Till 10 to 20 years term life premium insurance give you financial protection. After 10- 20 years you may offer long term financial protection. This type of policy is quite cost effective than permanent life insurance policy. Rather than it is has little disadvantage as the premium will be only paid if the person dies. If he or she will not die than no portion will be paid to insured person.
Universal life Insurance
This type of insurance policy is fabricated to provide life time coverage. This type of insurance is elastic and also allows you to mould your premium accordingly. This insurance runs throughout the lifetime. This policy has additional quality like it is lifetime coverage and has higher premiums than term. In this policy the interest rate is low and as told above that the premium fluctuates, when premium rises in interest rate declines which are the biggest disadvantages of universal life insurance.
Whole Life Insurance
Whole life insurance is just like universal life insurance. It is also fabricated to cover lifetime coverage of the insured person. But this doesn’t have flexible premium and flexible interest rates. This has fixed premium. This type of insurance covers losses till whole life of insured person.
These are 3 basic types of life insurance which have different types of benefits. You can purchase these according to your need and requirement. It has different advantages and disadvantages.