It’s a safest and surest method of guaranteed cash provision either at a specified time or at death (Allah forbid). Under these policies, the sum insured plus bonuses are payable at the end of the specified number of years or at death of the life insured if earlier. Premiums are payable for the specified number of years or till death, if earlier. The benefits under the plan can be further increased by attaching supplementary covers.
Your family is important to you; they are your joy, your pride and your world. This unconditional connection and bond of loved ones gives meaning to your life and you strive to give them the best in life. Securing their future means you have to be there for them at the best and worst of times, through thick and thin and through sickness and health. To protect them you require an investment and protection package that is specially designed to help you plan wisely for a financially secure and comfortable tomorrow.
What Is Life Insurance?
Life insurance is a contract between a life insurance company and a policy owner. A life insurance policy guarantees the insurer pays a sum of money to one or more named beneficiaries when the insured person dies in exchange for premiums paid by the policyholder during their lifetime.
- Life insurance is a legally binding contract that pays a death benefit to the policy owner when the insured person dies.
- For a life insurance policy to remain in force, the policyholder must pay a single premium upfront or pay regular premiums over time.
- When the insured person dies, the policy’s named beneficiaries will receive the policy’s face value, or death benefit.
- Term life insurance policies expire after a certain number of years. Permanent life insurance policies remain active until the insured dies, stops paying premiums, or surrenders the policy.
- A life insurance policy is only as good as the financial strength of the company that issues it. State guaranty funds may pay claims if the issuer can’t.
Types Of Life Insurance
Term Life Insurance
Term life insurance is designed to last a certain number of years, then end. You choose the term when you take out the policy. Common terms are 10, 20, or 30 years. The best term life insurance policies balance affordability with long-term financial strength.
Many term life insurance policies allow you to renew the contract on an annual basis once the term is up. This is one way to extend your life insurance coverage but since the renewal rate is based on your current age, premiums can rise precipitously each year. A better solution for permanent coverage is to convert your term life insurance policy into a permanent policy. This is not an option on all term life policies; look for a convertible term policy if this is important to you.
Permanent Life Insurance
Permanent life insurance stays in force for the insured’s entire life unless the policyholder stops paying the premiums or surrenders the policy. It’s more expensive than term.
Permanent life insurance is an umbrella term for life insurance policies that do not expire. The two primary types of permanent life insurance are whole life and universal life, and most permanent life insurance combines a death benefit with a savings portion. Whole life insurance offers coverage for the full lifetime of the insured, and its savings can grow at a guaranteed rate.
Universal life insurance also offers a savings element in addition to a death benefit, but it features different types of premium structures and earns based on market performance.