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How To Choose The Right Life Insurance Policy?

By Expert Author: Vincent Yeong | Article Abstract
Word Count: 420 words | Views: 159 view(s)
What is Life Insurance Policy?

A life insurance policy is a contract between the insurer and the policyholder. In general the one who pays regular amount of payments called premiums to the insurer is referred as policyholder, the one who receives the premiums and in return will pay the specified amount to the beneficiary or nominee is called insurer.

This is a mutual benefit because the insurer collects premiums and invests the money into the market and makes profit, in return he pays the death benefits to the buyers’ appointed beneficiaries upon their (buyers) death.

How to choose the right life insurance policy?

A life insurance policy provides you and your family security; it gives financial protection to a family if the bread-winner passed away.
Many people have considered getting a policy, but the insurance products are so many, it is time consuming to find out all of them thoroughly. Sometimes you might find a suitable coverage but the premium is too high, or when it is affordable but the benefits you find them not satisfactorily. Life insurance policies are basically the same, whether you want a policy with or without cash value, or with dividend and investment.

Term life insurance

This form of policy is the most basic type of insurance; it has the cheapest premiums, because it is designed solely for life protection only, it provides the buyer with no cash value. Term life insurance is not a saving plan; it has various types of policy, such as increasing and decreasing term, or ten, twenty and thirty level term.

Whole life insurance

Many people find this policy unaffordable, but it has been selling for many years and is one of the most popular products in the market. The reason is that it has cash value, and it is like a saving plan. This policy provides the buyer with death benefit, and the cash value can be withdrawn when time in need.

Universal life insurance

This is another option that offers the buyer the same benefits as whole life insurance, but the premium is put into investment and dividend is payable to the buyer.

Endowment life insurance

This policy has a very much higher premium than others because it has a short term of maturity, and is designed as saving plan. It is much recommended to young people who want to have big saving and at the mean time have coverage. Upon the maturity lump sum of money is payable to the policy holder, and he can have some cash to make his own investment.
Vincent Yeong

About the Author/Author Bio

Basically life insurance is to provide protection to your loved ones, you can choose a policy solely for protection, or you want protection and saving as well. No matter which policy you prefer, choose the right life insurance policy, and please log on what is life insurance and different types of life insurance to find out more, or visit us at http://www.indianapolislifeinsurance.net.

Article Source: http://www.articlesphere.com/Article/How-To-Choose-The-Right-Life-Insurance-Policy-/186919

Article Submitted: 2009-05-19 | This Article has been viewed 159 times.

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