What is life insurance?
Life insurance is an agreement between the insured person (Policyholder) and the insurer (Insurance company) which states that the insurer has to pay a sum of money to the stated beneficiary upon the death of the policyholder. The insured person (Policyholder) pays a specific amount of premium and the insurer promises to pay to the beneficiary as per policy.
What are the types of life insurance?
Major types of life insurance are Term life insurance, Whole life insurance, Universal life insurance, and Variable Universal life insurance.
What are the types of life insurance policies?
Major types of life insurance policies are: Whole life policy, Term insurance policy, Endowment insurance policy, Money-back policy, Joint life policy, Children’s policy, Annuity policy, Pension plan policy, and Unit linked insurance policy (ULIP)
What is term life insurance?
Term life insurance is also known as term assurance or pure life insurance is a type of life insurance that covers a fixed payment for a limited period of time. If the insured period dies in that particular period then the beneficiary will get the fixed amount stated in the term life policy.
What is whole life insurance?
Whole life insurance is also known as whole life assurance is a permanent life insurance policy in which an insured person (Policyholder) is covered for the entire life, the insured person has to pay premiums till the maturity date. Whole life policy is also known as straight life policy or ordinary life policy
What is universal life insurance?
Universal life insurance is also known as cash value life insurance in which the person is covered as long as he keeps on paying the insurance premium, if he continues to pay the premium and follows all the requirements of the policy then he is covered for his entire life.
What is supplemental life insurance?
Supplemental life insurance can be purchased along with the whole life insurance policy, it adds an extra layer to the existing policy, it covers things such as burial cost or accidental death dismemberment.
How much life insurance do I need?
Life insurance policy can be decided as per the needs of the family in future, usually, people buy insurance cover 10 to 20 times the amount of annual salary. Factors such as age, education loans, the current running cost of family, assets, or liabilities can be helpful to decide whether to buy a higher amount policy or a lower amount policy.
How does life insurance work?
Life insurance is a contract between the insurer and the insured person. Policyholders pay the premium and the insured promises to pay some amount of money to the beneficiaries if the insured person dies. The payment terms vary as per the type of insurance policy he/she selected.