Two Basic Classes of Life Insurance
Two Basic Classes of Life Insurance - Do you get protected by life insurance? Or are you planning
to get the life insurance? You may wonder why you need to get protected by life
insurance. For who have you own family, it will become one of the most important
financial protection tools for your and the ones you love. It will give
financial protection when unexpectedly there is something bad happen to you.
Let’s say that one day, unexpectedly, you get involved in an accident and you
don’t survive. What happen with your wife and children? By having life
insurance, the insurance company will protect your family financially. The
insurance company will exchange the premium that you have paid with dead
benefit which given to your family.
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| Two Basic Classes of Life Insurance |
Basically, there are two basic classes of life insurance
that you need to understand before applying to any life insurance company:
Temporary and Permanent life insurance.
Temporary Life Insurance
Temporary life insurance is one of basic classes in life
insurance. It is life insurance that will protect you the ones you love
financially in some period of time. In this class, there will be a clear period
when the insure will start and stop protecting your financially. Term life
insurance is one of the most common types of temporary life insurance. In term
life insurance, there will be term of time for the life insurance will protect
you financially. The insurer and insured can discuss and determine the term of
time in the contract or policy. It can be in term of 1 year. However, the most
common terms are 10, 15, 20 and 30 years. During the term, the insured should
pay premium that have been conducted in the contract. By paying the premium,
the insurance company will protect you and the ones you love by paying the
death benefit to the beneficiaries such as you family, upon your death in the
specific period of time. Depending of the contract, some serious or critical
illnesses can be covered by the life insurance.
Permanent Life Insurance
Permanent life insurance is another class of life insurances
which gives you financial protection for your remaining lifetime. Unlike
temporary life insurance, permanent life insurance will not set period of time
which the insurance will protect you. Basically, permanent life insurance will
be active permanently or until the day you’re gone. Due to the lifetime
coverage, the premium payment may be more expensive than term life insurance.
Permanent life insurance also provides cash value that can be accumulated and
functioned as saving component. Universal and Whole life insurance are the most
common types of permanent life insurance.
Universal Life
insurance
Universal life insurance is type of permanent life insurance
that provides lifetime protection. One of the most important features in Universal
life insurance is the flexibility setting or determining the policy, such as
raising and lowering the premium payment amount during your lifetime. With
universal life insurance, you can also flexibly set the death benefit
Whole Life
Insurance
The Whole Life Insurance is also one type of permanent life
insurance. It will give you protection in your remaining lifetime. What is the
difference with universal Life insurance? Unlike universal life insurance that
is flexible in setting the premium payment amount and the death benefit, whole
life insurance has fixed premium payment amount.
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