Life Insurance

Life Insurance is an essential part of our life but many of us are completely unaware of its pros and cons. We pay our premiums and feel secure but we do not find time to check exactly what benefits we are entitled for. Starting from today, every week we will have a posting on 'insurance' and we will try to cover various aspects of it.

There are two basic types of life insurance. Term insurance protects you for a limited, specified period of time, while permanent insurance combines a death benefit (the proceeds the beneficiary of a life insurance policy receives upon the death of the insured) with a savings component. Especially during your younger years, term insurance generally offers the higest death benefit for the premium. It also allows you to convert your coverage into payment insurance during what's known as the conversion period.

Permanent insurance comes in various forms, including whole life (also known as ordinary life), universal life, variable universal life and several kinds of survivorship life. All of these policies combine a death benefit with an accessible savings, or cash value, component that you can use for a variety of financial goals. Because permanent insurance is designed to provide lifelong coverage, it usually requires higher initial premium than do term contracts for the same amount of coverage.

Frequently, both permanent and term life policies offer an accelerated benefits option that enables you to receive your death benefit early if you become terminally ill, and a waiver of premium rider, available at an additional cost, which automatically pays your premium if you become totally disabled. (certain restriction apply to both of these options).

We will elaborate on these various kinds of insurance products in our future postings.