Two Basic Classes of Life Insurance

October 07, 2017

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.

Two Basic Classes of Life Insurance
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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