Several Things That You Should Know Before Purchase Life Insurance

September 23, 2017

Several Things That You Should Know Before Purchase Life Insurance

Several Things That You Should Know Before Purchase Life Insurance - The policy of life insurance is the contract with the insurance company. As the exchange of premium payment, the insurance company provides you with the lump sum payment or had been known as the death benefit to the receiver upon the insured death person. Generally, the life insurance was decided based on the goals and needs from the owner. The term of life insurance usually provide protection for certain time period, while the permanent insurance similar with the universal live and provide the insurance holder with lifetime coverage as well. Keep in mind that the death benefits that come from all of types in life insurance were typically income tax free. There are several types of life insurance that you should know first before you purchase it.

Several Things That You Should Know Before Purchase Life Insurance
Several Things That You Should Know Before Purchase Life Insurance

The term of life insurance

Life insurance had been designed to provide financial protection for certain time period, such as: 10 oe 20 years. In the traditional term of insurance, then premium payment will remain same for period time that you choose. After that period, the policy might offer you with continued coverage, usually with higher premium payment. The term of life insurance is usually less expensive than the permanent time of life insurance.

So, the term of life insurance can be used as replacement for the lost potential income during your working years. It provides you with safety net for the insurance holder and ensures that your family’s financial goal is met, such as: paid off the mortgage, college or running business. This is important to note that whether this term life can be used as replacement for losing potential income, you should know that the life insurance benefits were paid in one time, not come in regular payment like your salary.

The universal life insurance

This universal life insurance is the type of permanent life insurance that had been designed to provide the lifetime coverage. Dislike the whole life insurance, the policy in universal life insurance is flexible and allows you to increase or lower your premium payment or amount of coverage in your lifetime. Generally, the universal life insurance has higher premium price than the term insurance.

Universal life insurance is often can be used as the flexible planning strategy in order to preserve you wealth that had to be transferred to be beneficiaries. There are several universal life insurance products are focused on providing in both of buiding cash value and coverage for death benefit while the others might be focused on provide guarantee for death benefit coverage.

The whole life insurance



This insurance is also type of permanent insurance that had been designed to provide lifetime coverage.  Of course, this type is also higher than the term insurance. However, the premium payment usually fixed and the whole life is getting cash value which had been functioned as the saving element that can be accumulated the tax differed over the time as well. The whole life also can be used as the planning tool to help preserve your health that need to be transferred to the beneficiaries.
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