Life insurance might not be one of the best things to think about, I mean you are literally planning the future for a family or loved one that does not involve you but failing to do so can be very bad for them.
A life Insurance policy is a legal contract or agreement between a person and an insurer or an insurance company that allows the insurance company premium payment from an insured person in exchange for a lump sum later paid to beneficiaries known as death benefits. This contract depending on the type will contain every feature guiding the kind of Live insurance policy an insured person chooses which also depends on the goals, budget, and needs of the insured person.
The person responsible for making payment for the insurance policy, This person is basically the guarantor of the contract, setting the policy and the terms of the contract.
The insured person is the person on the contract whose death or unavailability (depending on the statement of the contract it could also be illness) will trigger the lump payment or death benefit. The policy owner and the insured person might be the same person if a person gets an insurance policy regarding his/her own life
A person or an Insurance company that undertakes to compensate specified losses or damages. This individual or group will pay certain lump payments to a designated beneficiary immediately the insurance policy contract is triggered.
The specified payment which is paid by the policy owner, depending on the contract of the policy it could be flexible or rigid.
Classes of Life Insurance
Life insurance used to just involve contracts stating that at someone’s death a lump payment will be made, with time changes and improvements came to how life insurance contracts are made.
The common form of policy whereby a lump sum payment will be paid to beneficiaries provided the policy contract is triggered, a specified event occurs and the premium is regularly paid
Almost like its counterpart with the difference being the investment part, the aim is to improve or increase the cash value of premiums paid
Basically, there are two types of Live Insurance Policy;
Term Life Insurance
This works over a given period of time, at expiring there will be choices on renewal, termination or upgrading to a permanent kind of life insurance or a higher premium based Term Life Insurance. It is affordable but its premium payment is rigid until the contract expires.
Permanent Life Insurance
As the name implies it is permanent, this kind of insurance can be quite expensive because it can cover everything about your life and have a rigid premium payment like the Whole Life Insurance, have flexible premium payment and still have the same features as the whole life insurance like the Universal life Insurance. Its lump payment can be very large depending on the number of premium payments because this kind of life insurance like the Variable and Indexed Universal Live insurance could invest premiums payments.