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What Is Life Insurance? Guide to Life Insurance by Kenrick Hoogan
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What Is Life Insurance? Guide to Life Insurance |
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Insurance,Advice,Business
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The question often strikes our mind as to … “What is Life Insurance?” To answer that, it is a policy that is developed in co-ordination with the life insurance agency involving the exchange of premiums or payments against an insurance cover on the death of the policy holder which can sum up to a large sum of money which is given to the beneficiaries of the person who covers himself under life insurance. Life insurance can be classified under two heads namely term based life insurance and permanent or long term life insurance. In the case of term based life insurance, the life insurance coverage occurs only for a fixed period of time. Long term or permanent insurance is that form of life insurance that offers lifetime coverage. The best part about life insurance investments made by a policy holder is that they are completely tax free. A term based life insurance coverage policy is always less expensive as a life insurance venture in comparison to permanent insurance coverage as you will have to pay premiums only for a fixed period of time. If you want to replace low potential income than the term based life insurance policies are the best policies to opt for. This insurance coverage is very beneficial for the beneficiaries as it can be utilized in paying off debts, school and college or other educational expenses as well as business related expenses. The sum as benefits is usually paid off in bulk in the case of term based life insurance coverage policies. In comparison, universal and whole life insurance are permanent insurance policies which are meant to provide coverage for a lifetime. Amongst these two, the universal life insurance policies are always found to be better than the whole insurance policies due to their good flexibility in payment of premiums where a policy holder can increase or decrease the amount of premium to be paid at will throughout the entire tenure of the policy. Universal life insurance policies may be having higher premiums than the short term life insurance policies like term based life insurance policies but they are surely beneficial and better than the latter as they pay a vital role in building up of wealth for the future. Another high premium permanent life insurance policy is the whole life insurance policy, which likes the universal life insurance policy, is designed for life coverage. If you want to collect and collate your tax deferred savings it should ideally be done through whole life insurance policies. So if you have plans to transfer a large sum of money to your beneficiaries in the event of your death, it is advisable to opt for whole life insurance policy. Remember there are many factors that can decide your premium amount out of which health plays an important role. The rate class in opting for premiums for the payment of your life insurance plans will be very dependent on your health, your family’s medical background as well as your lifestyle.
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