Understanding all the different types of life insurance policies
There are so many different kinds of life insurance policies, that if you are just a normal person with no life insurance background, you don’t understand all the different types of life insurance policies. And how can you choose a life insurance policy that is best for your family if you don’t understand each of them. Here are just a few of the life insurance policies in easy language, so everyone would know what they really mean.
Term life insurance policy
Term life insurance policy is for just a period of time. For example: You get a term life insurance policy for 20 years. You are paying a monthly premium for that period of 20 years. If you die during that 20 years, your family will get the amount of money agreed on in the policy contract. If you don’t die in that period, you will lose your premiums paid and the life insurance is cancelled. Then you must apply for a new life insurance policy. The monthly premiums are usually the lower with the term life insurance than with the other types of life insurance policies. The downside is the fact that you will lose that 20 years of premiums if you don’t die in that 20 years period.
Whole life policy
Whole life policy is the most common policy people have. Whole life policy is a life insurance policy that is covering the policy holder throughout his life. There is no specific period involved. You will pay regular premiums throughout your life until your death. Then after your death, your family will get the amount of money that was agreed on the contract to the beneficiary. The premiums paid with the whole life policy are tax exempt. The downside to this type of policy is the fact that at the end of the day, you might pay more in premiums that that your family would actual getting out. You don’t know when you will die, so you don’t know for how many years you are going to pay for the whole life policy.http://www.brokerservicenetwork.com/critical-illness-insurance-cover/
Endowment life insurance policy
With this type of policy, you can benefit in two different ways: The first is when your family gets an amount when you are dead. The other benefit is if you survive the policy tenure, you will get all your premiums paid back with other investment returns and other benefits. These premiums are also tax exempt. This is the type of life insurance policy that more and more people asking for.
Money back life insurance policy
Many people life this type of Life insurance policy, because it gives you periodic payments during the term of the policy. It means that you are getting a portion of the total amount on regular intervals. And if you survive the full term of the policy, you are getting the balance sum that was agreed on in the policy, back.
Understanding this four types of life insurance policies better, you can make a better decision is which policy is the best for your personal needs and what will benefit your family best when you are not there to support them anymore.