What Is Life Insurance: An Introduction

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Investment Insurance
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What Is Life Insurance An Introduction
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Introduction
Life insurance is a type of insurance that pays
monetary proceeds to the beneficiaries in the
event of the insurance-takers demise. The policy
is valid as long as the premiums are paid on time
as long as the policy is in effect or as long as
they are applicable. Initially, these policies
were designed for the principle breadwinner of a
family, so that in the event of the death of such
a person, the rest of the family would not be
harmed monetarily from the loss of income that
the breadwinner earned. But more recently, life
insurance policies are taken by members other
than breadwinners, including for children.
Broadly speaking, there are two types of life
insurance plans - Term plans, and
investment-insurance plans, also known as
whole/variable plans.
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Whole and Variable Life-insurance Plans
These are also called Unit Linked Insurance Plans
in some Commonwealth countries. In these plans,
Investment Insurance is just one part of a
complete investment product. The other part is a
investment scheme in which the part of premium
paid is invested in the different types of
securities. A part of the premium pays for the
insurance cover, whereas the rest of the premium
is invested. This investment allows for the
invested capital to build up over time.
Source http//bit.ly/2cnVPs4
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Term Insurance Plans
This can be called the purest form of life
insurance. Under term plans, you only pay for
insurance, and nothing else. This means that
unlike variable or whole insurance, you do not
get a payout at the end of the plan. This leads
many people to believe that term insurance is an
inferior product - but the reality is different.
The payout at the end of variable insurance plans
is just your own investment being returned to
you. The advantage of term insurance plans is in
its lower premiums.
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Premiums
The premium for someone depends on many factors -
but primarily it depends on the age of the
person. Premiums are lower for younger people,
and more for older one. The reason is not far to
seek, and is completely dependent on the
mortality rate at any age. If you want insurance,
it is a good idea to get Investment Insurance
when you are still young, and can lock in the
company at lower rates - though the premiums will
increase with age, they will not increase as much
as when you take the policy when you are older.
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