TYPES OF LIFE INSURANCE.......!!!

TYPES OF LIFE INSURANCE.......!!!

Types Of Life Insurance : There are two broad classes of insurance policies. These are ‘term’ and ‘universal life’ policies.for simplicity, we have built-in ‘whole life’ policy under the rubric of universal life.
Term insurance.....Term insurance is what comes to mind when most populace contemplate an insurance policy. In this situation, the insured pays a premium to the insurance company on a monthly or yearly basis. These premium entitle the insured to be paid a benefit in the event of death. The characteristic policy is applied over a defined period of time. In most instances, the term of the policy is between 10 and 20 years. If that time elapses and the insured is alive there is no remaining value remaining in the policy. As a result, >90% of term policies by no means pay any benefits (no wonder insurance company are so profitable!).
Universal life.....This is a more complicated policy. In this scenario, premiums are also paid; however, a portion of the premium is paid to fund the ‘insurance’ portion of the policy. The remaining premium serves as an investment. Similar to other managed securities, there is a fund manager who uses this cash to invest in securities. These securities then appreciate and generate income from the policy, which accrues to the policy holder. This accumulate value compound within the policy.
subsequent to a certain time of time, the income resulting from these investments is adequate to underwrite the premiums for the term insurance. As a result, the policy becomes self-funding. No additional premiums are paid in cash by the insured. The policy is effective for the complete life of the individual and is paid on the individual’s death. These benefits are paid regardless of the age of the personage. besides, the total benefits characterize the quantity of insurance that was purchased; in addition, they embody the accrued value of the investment portion of the policy.