Life Insurance: Policies and Benefits

You never know what happens next. Whether you like it or not, there are things in life that happen beyond control. For this reason, it will be greatly advantageous if you have something to hold on to in case unexpected untoward incidents occur. The good news is that there’s life insurance policy that you can get to ensure that you and your family will have the necessary financial assistance in the middle of unfortunate instances in life. This type of insurance comes in various policy plans such as the whole life and the universal life plan. Read on and learn more about them.

Whole Life Insurance Policy

If you want a fully-guaranteed and most secured policy, then you should choose the whole life policy. The death benefits and the premium are established or pre-defined upon your purchase. The premium in this policy is fixed, but the death benefits may increase. This type of life insurance plan has guaranteed cash value.

Universal Life Insurance Policy

This is a combination of whole life and the term insurance. In this policy, the death benefits could increase while the premium would never increase. Many people think that paying minimum premium is attractive, but there’s also a target premium. This type of policy involves cash value otherwise you need to pay the premium so that the policy would not lapse.

On the other hand, if you will get universal life insurance, you should choose between the indexed universal and the variable universal life. The main difference between this two is where and how the insurance company will invest the cash value. The cash value in variable life insurance is allowed to invest in stock market, but loses can be possible. On the contrary, the indexed policy is directly investing the cash value on stock market, but the policy holder can have the chance to gain from the market without suffering any losses.

Making the right decision in getting life insurance can be confusing, but it should be your personal choice. If you want to have peace of mind throughout your life and without worrying the premium, the cash value and death benefits, then you should choose the whole life policy. It’s because you just need to deal on it once although it carries highest initial premium.

The universal life policy is designed for people who want to have life insurance for the entire life, but the cash value is guaranteed not to increase. However, the premium is flexible and can be manipulated according to the budget and needs of the person.

Benefits

Life insurance carries death benefit that is tax-free. However, the accumulated cash can be used while the policy holder is still alive and it’s commonly used for college planning and retirement planning. Unlike any other insurance policies, this type of insurance lets you enjoy tax favorably. It’s all about safety, protection and transferring the risk instead of assuming it. It’s more of an investment than net safe and predictable returns.

When purchasing life insurance, you should see to it that the policy term and your needs match. It’s best to invest in insurance policy while you’re still young and healthy so that the rates will be lower. This way, you and your dependents will be able to receive greater benefits.

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