Why life insurance is important?

A lot of people often tend to overlook the advantages that come with buying a comprehensive life insurance policy. One of the major benefits of a life insurance policy is that it can provide financial assistance that has just lost one of the earning members of their family. As awkward as it sounds, all individuals have to consider the possibility that they might not be around always to protect and look after their spouse and children. A sudden accident or a late diagnosis of a terminal medical condition may not leave you with enough time to arrange for sufficient funds to serve the needs of your family after your gone.

With a life insurance policy, investors can pay monthly premiums and get insurance products which payout substantial sums of money in the form of death benefits. You could go in for a temporary life policy like term insurance or a more permanent life product like whole life depending on your own set of requirements.  Life policies offer coverage benefits which can range anywhere between $100,000 to a $ 1 million or more. The proceeds from a life insurance policy can go a long way towards providing financial stability to your family.

Types of life insurance policies on offer:

Term life insurance

This is one of the most popular and affordable types of life insurance policies available in the market. The investor here purchases the policy for a specific length of time and pays constant rate of premiums for the entire duration of the term. If the death of the policyholder occurs when the policy is alive, the assigned beneficiaries stand to receive a considerable sum of money in the form of death benefits. You can buy a term life policy for 1, 5, 10, 15, 20, 25 or even 30 years depending upon you’re own set of requirements. It should be noted that if the investor survives the policy, then he nor his family members stand to gain nothing from the insurance.

Whole life insurance 

In this type of policy, the investor is insured for life and the premium rates remain constant for the entire length of the insurance. Apart from the obvious death benefits as part of the coverage, the insurance also accumulates in cash value over the life of the policy. The policyholder however has no control over how the cash reserves are invested by the insurance company. As a result whole life policies are more expensive than term life products.

Variable life insurance

This type of policy is aimed at offering substantive investment options to the policyholder. Cash value is known to accumulate in variable life insurance policies also and the policyholder here can decide how to invest the cash reserves among the choices offered by the insurance companies.  If the market is bullish, the investor holds a good chance of enhancing his or her cash value while the investor can also lose a lot of money during a market downturn.

Universal life insurance

With this type of policy, salient features of both term and whole life insurance are combined to offer a unique insurance package. Premium rates can be altered here after making deductions from the accumulated cash reserves. The investor can also alter the amount to be received as death benefits in the insurance. Universal life insurance offers the investor a lot of flexibility when it comes to maintaining their policy.  This way you can make particular changes to the insurance based on you’re current financial profile. It is costlier than traditional term life policies and generally cheaper than whole life products. As a result applicants may have to pay higher administration fees while buying this insurance.