Different Types of Insurance
Posted on June 28, 2009 - Filed Under Life Annuities | Leave a Comment
Life insurance in today's world is seen more as a need than as a want. To fulfill each and every need, the already existing policies are modified and tweaked and are made to suit some of the special needs of people.
The rates change from person to person. A person starting with his career will prefer a lower premium amount. It also depends upon the type of insurance plan opted. Following are the difference between the two:
- It is the insured that will be benefited, in the first go, as this would give him the freedom to enjoy his money after the duration of the insurance is over. However, the amount would be given to the beneficiaries in a life insurance.
- The premium in a plan is less as contrary to the endowment plan. The reason being that the endowment plan matures after some time.
Even within the general term of it, there are different plans to suit different people.
1. You can make changes at any point of time in your premium amounts and death benefits if you are insured under Universal Life Insurance. Please note that modifying the death benefits might need you to prove your good health with some new evidences.
2. The Whole Life Insurance is guaranteed to last throughout your whole life. It is, however, significantly more expensive than Term Life Insurance or Universal Life Insurance as it builds up its cash value as the years go on. The Whole Life Insurance also allows loans to be used during the insured's lifetime. The sum borrowed against this insurance plan can be used for college tuition fees, to buy a first home or added to any retirement fund. Unlike the Universal Life Insurance plan, this plan features fixed premiums.
3. The easiest to apply, an insurance with low premiums is Graded Benefits Life Insurance. But with these advantages, there comes some disadvantages as well. The complete insurance amount cannot exceed $50000. The death benefits are also limited initially.
Term life insurance forms another category of insurance. It does not benefit the insured in any way and is used for needs like Personal Accident, Travel, Fire, Car/Hire Purchase or Medical/Hospitalization. However, the beneficiaries are benefited of the insured dies.
As they are intended for a specific, relatively short time, term rates are fixed premiums that do not increase in value over the years. They are often regarded as the most inexpensive way of getting sufficient coverage for an important, immediate need. Once that term expires, the insured does not receive any cash claims for the so-called unused insurance. In fact, the opposite happens - the insured often renews the insurance for another term under the same conditions.
Term rates for specific types can actually decrease with the years. One good example is auto insurance - as the vehicle's hire purchase loan decreases in its debt balance, so does its insurance.
Term is considered to be the original form of insurance since it is free form cash value and there is no investment-linked or loan attachments. It is meant to serve the actual purpose of an insurance.
David Livingston has been involved in the insurance industry for a long time and is considered to be one of the leading expert in this industry. For more information on how to get affordable term life insurance or getting term life insurance rates, visit his site today.
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